4. Other expenses. Caroline estimates that a total of 1,000 in other expenses will be paid each month. s. Drawings. She plans to draw 700 per month in cash. 6. Private view expenses. In each of the three months Caroline will have to spend an estimated 450 on buying in wine and other refreshments for the private view. This figure also includes the cost of hourly- paid waiting staff to take drinks round to guests. 7. Advertising. The initial round of press adverts will appear in December, and the 3,000 cost will be paid for out of Caroline's remaining 10,000. Each month 400 will be paid for brochures and postage costs to send out to people on the gallery's mailing list. The bank balance at 1 January 20X4 will be 2,000 after advertising and catalogue costs have been paid for. The advertising and catalogue costs form part of Caroline's start-up capital. The gallery premises are to be depreciated over 25 years on the straight-line basis, with an assumption of nil residual value. Questions: (indicative wordcount 520 words) Prepare for Caroline: a) a budget cash flow statement for the three months of January, February and March 20X4 b) a budget statement of profit or loss for the three months ending 31 March 20X4 c) a budget statement of financial position at 31 March 20X4 and: d) briefly discuss whether or not you think Caroline's business is going to be successful, identifying any areas where cash flow might be a problem. Case Scenario 5 -Tawas Tawas has just set up his new IT consulting company in London and has approached you to get advice taxes, banking and financing in particular he wants to know about the various types of taxes he might have to consider and the various banking and corporate services and products that are available to him. Questions: (indicative wordcount 70 words) Write him a short paragraph with your advice References Note to student: Please include all references in 4. Other expenses. Caroline estimates that a total of 1,000 in other expenses will be paid each month. s. Drawings. She plans to draw 700 per month in cash. 6. Private view expenses. In each of the three months Caroline will have to spend an estimated 450 on buying in wine and other refreshments for the private view. This figure also includes the cost of hourly- paid waiting staff to take drinks round to guests. 7. Advertising. The initial round of press adverts will appear in December, and the 3,000 cost will be paid for out of Caroline's remaining 10,000. Each month 400 will be paid for brochures and postage costs to send out to people on the gallery's mailing list. The bank balance at 1 January 20X4 will be 2,000 after advertising and catalogue costs have been paid for. The advertising and catalogue costs form part of Caroline's start-up capital. The gallery premises are to be depreciated over 25 years on the straight-line basis, with an assumption of nil residual value. Questions: (indicative wordcount 520 words) Prepare for Caroline: a) a budget cash flow statement for the three months of January, February and March 20X4 b) a budget statement of profit or loss for the three months ending 31 March 20X4 c) a budget statement of financial position at 31 March 20X4 and: d) briefly discuss whether or not you think Caroline's business is going to be successful, identifying any areas where cash flow might be a problem. Case Scenario 5 -Tawas Tawas has just set up his new IT consulting company in London and has approached you to get advice taxes, banking and financing in particular he wants to know about the various types of taxes he might have to consider and the various banking and corporate services and products that are available to him. Questions: (indicative wordcount 70 words) Write him a short paragraph with your advice References Note to student: Please include all references in
