1. Weekend breaks sell for 300 each. Ten per cent is payable when the holiday is booked and the remainder after two months. 2. Travel agents are paid a commission of 10 per cent of the price of the holiday break one month after the booking is made. 3. The cost of a flight is 50 per holiday and that of a hotel 100 per holiday. Flights and hotels must be paid for in the month when the holiday breaks are taken. 4. Other variable costs are 20 per holiday and are paid in the month of the holiday break. 5. Administration costs, including depreciation of non-current assets of 42,000, amount to 402,000 for the six months. Administration costs can be spread evenly over the period. 6. Loan interest of 10,000 is payable on 31 March Year 5 and loan repayment of 20,000 is due on that date. For your calculations, ignore any interest in the overdraft. 7. The trade payables of 180,000 on 30 September are to be paid in October. 8. A payment of 50,000 for non-current assets is to be made in March Year 5. 9. The airline and the hotel chain base their charges on Davis Travels forecast requirements and hold the capacity to meet those requirements. If Davis is unable to fill this reserved capacity, a charge of 50 per cent of those published above is made. Required:

Prepare: (i)A projected cash flow statement for the six months to 31 March Year 5. (ii)A projected income statement for the six months ending on that date. (iii)A projected statement of financial position at 31 March Year 5.

Statement of financial position as at 30 September Year 4 000 560 ASSETS Non-current assets Property, plant and equipment Current assets Cash Total assets EQUITY AND LIABILITIES Equity Share capital Retained earnings 30 590 100 200 300 110 Non-current liabilities Borrowings loans Current liabilities Trade payables Total equity and liabilities 180 590 Its sales estimates for the next six months are: Number of holidays taken Promotion expenditure (000) 100 October November December January February March Total Number of bookings received 1,000 3,000 3,000 3,000 150 150 50 1,000 4,000 3,000 2,000 10,000 10,000 450 Statement of financial position as at 30 September Year 4 000 560 ASSETS Non-current assets Property, plant and equipment Current assets Cash Total assets EQUITY AND LIABILITIES Equity Share capital Retained earnings 30 590 100 200 300 110 Non-current liabilities Borrowings loans Current liabilities Trade payables Total equity and liabilities 180 590 Its sales estimates for the next six months are: Number of holidays taken Promotion expenditure (000) 100 October November December January February March Total Number of bookings received 1,000 3,000 3,000 3,000 150 150 50 1,000 4,000 3,000 2,000 10,000 10,000 450