Business Economics Assignment: Financial Statement Analysis Report

This document presents a comprehensive solution to a Business Economics assignment, focusing on financial statement analysis, budgeting, and accounting principles. The assignment includes a budgeted income statement for Julia Schlusser & Co, showcasing revenue and expense calculations to determine net profit. A detailed cash budget is provided, outlining cash receipts and expenses across four quarters, culminating in a closing balance. The solution concludes with a balance sheet that presents the company's assets, liabilities, and equity, reflecting the financial position at the end of the year, including calculations for depreciation and the transfer of net profit. The solution uses information from the year 2018 and is supported by a bibliography of relevant financial accounting resources.

Running head: BUSINESS ECONOMICS
Business Economics
Name of the Student
Name of the University
Authors Note
Course ID

1BUSINESS ECONOMICS
Table of Contents
Answer to question 4:.................................................................................................................2
Answer to question 5:.................................................................................................................2
Answer to question 6:.................................................................................................................3
Bibliography:..............................................................................................................................5

2BUSINESS ECONOMICS
Answer to question 4:
Budgeted Income Statement
In the Books of Julia Schlusser & Co
For the year ended 2018
Budgeted Income Statement
Particulars Amount (€) Particulars Amount (€)
To Advertisements 180 Sales Revenue 10000
To Fuel 180
To Maintenance Cost 100
To Website maintenance cost 75
Loan repayment 400
To Depreciation
camera (2500/5) 500
Scooter (1500/5) 300
Computer (1600/4) 400
Software (800/4) 200
2335
To Net Profit 7665
Transferred to capital A/c
10000 10000
As evident from the above stated income statement it can be said that the net profit
that has been transferred to capital account stood €7285.
Answer to question 5:
Cash Budget for the period 2018
Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4
Opening Balance 600 3533.75 5467.5 6401.25
Receipts
Cash Receipts 3500 2500 1500 2500
Total 4100 6033 6967 8901
Expenses
Overheads 275 275 275 275
Selling Expense 291.25 291.25 291.25 291.25

3BUSINESS ECONOMICS
Total 566 566 566 566
Closing Balance 3533 5467 6401 8335
Cash receipts for the first year = 50*70 = 3500
Cash receipts for the Second quarter = 50*50 = 2500
Cash receipts for the Third quarter = 50*30 = 1500
Cash receipts for the Fourth quarter = 50*50 = 2500
Opening Balance = Opening Balance – Closing Balance
The closing amount of cash budget at the end of the fourth quarter stood €8335.
Answer to question 6:
Julia Schlussier & Co
Balance Sheet
January 31-12-2018
Assets Amount (€) Amount (€)
Current Assets
Cash 8335
Prepaid Insurance 260
Prepaid Road Tax 120
Total Current Assets 8715
Non-Current Assets
Tangible Assets
Scooter 1500
Less: Depreciation 300 1200
Photo Camera 2500
Less: Depreciation 500 2000
Computer 1600
Less: Depreciation 400 1200
Intangible Assets
Software 800
Less: Depreciation 200 600
Total Non-current Assets 5000

4BUSINESS ECONOMICS
Total Assets 13715
Liabilities and stockholder Equity
Current Liabilities
Current portion of Parents loan 400
Total Current Liability 400
Long-Term Liabilities
Parents Loan 1600
Less: Repayment 400 1200
Total Liabilities 2000
Stockholders Equity 2850
Net Profit (tranferred from P/L A/c) 7665
Total Liabilities and Stockholders Equity 13715
As evident from the balance sheet, that Julia & Co has the equal balance of the total
assets and total liabilities. The net profit has been transferred to balance sheet from the
income statement with owners’ equity standing €3230.

5BUSINESS ECONOMICS
Bibliography:
Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia.
Edwards, J. R. (2013). A History of Financial Accounting (RLE Accounting) (Vol. 29).
Routledge.
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to
concepts, methods and uses. Cengage Learning.
Williams, J. (2014). Financial accounting. McGraw-Hill Higher Education.