Asia (continued)

Notes 1. Fixed assets are at cost. Depreciation is at 10% straight line basis per year.

2. Purchases will be £4,800 in January increasing by £200 per month. They will be paid two months after purchase.

3. Sales will be £15,000 in January increasing by £400 per month. Debtors pay two months in arrears. They will be based on market price with no formal mark-up from gross profit.

4. Production cost per unit will be: direct materials £12; direct labour £10; production overheads £2 (direct labour and production overheads will be paid in the month incurred). Production 400 units per month. Sales 380 units per month.

5. Expenses will run at £6,000 per month. They will be paid in the month incurred.

Required:

Prepare sales budget, cash budget, debtors budget, creditors budget, production cost budget, raw materials budget, finished goods budget, trading and profit and loss account and balance sheet for six months ending 30 June 2002. LO1