63% + . . The Norwegian company Barbacoa AS Imports gas-heated barbeque grills from a manufacturer in China. The grills are distributed to Norwegian customers through three channels: the chain of hardware stores Nerdia, the chain of furniture stores Reldar, and from the company's own e commerce platform Barbacoa AS has six employees: The Managing Director, who also owns 30 % of the shares of the company. Two Key Account Managers, who are in changes of sales to Nerdia and Reidar. A Logistics Manager, who is responsible for the supply chain and warehouse. A Technical Manager, who handles the contact with the manufacturer as well as technical support to customers. An accountant who handles bookkeeping, payroll, and payments as well as having the responsibilities for the IT-Infrastructure and the E-commerce platform. Barbacoa's budget process is as follows: In November each year, the company makes activity plans for the forthcoming year. The demand for barbeque grills is highly seasonal, with more than 80% of the annual sales coming from the second and third quarter of the year. A Master Budget for the forthcoming calendar year is then made early December, with a budgeted income statement, a cash flow budget, and a budgeted balance sheet. The annual budgets are broken up in four quarterly budgets, to help the company to better follow up the seasonal variations in income and net cash flow. These quarterly budgets are often revised when new relevant information is available. The budgets for the third quarter of 2022 are now up for revision, due several things that have happened since the first version was made in December 2021. The original Q3 budgets were based on the following assumptions: 1. The company plans to purchase S 200 grills from their Chinese manufacturer. 2. The company expects a total sale of 8 600 grills. 3. The average purchase price charged by the manufacturer in Guangzhou Is USD 240.00 Including freight to Norwegian warehouse. The budgeted exchange rate is 1 USD = 9.20 NOK. This purchase price and exchange rate has also been used for purchases made in previous periods. 4. The sales are expected to be split as follows: Nerdia 50 %, Reldar 30 % and internet sales 20%. 5. Nerdia and Reidar pays on average kr 2 900 per grill, the Internet customers that order directly from the company pays kr 3 950. 6. Freight costs from Norweglan warehouse are paid by the customer 7. The monthly salaries are as follows: 1) Managing Director: kr 100 000 2) Key Account Managers: kr 65 000 each 3) Logistics Manager: kr 60 000 4) Technical Manager: kr 60 000 5) Accountant kr 55 000 8. In addition, the two Key Account Managers receives a bonus of 2.0 % of the orders to Nerdia and Reldar, 9. Instead of July salaries, the personnel are paid 12.0 % of their salaries in 2021 as holiday pay. This amounts to kr 518 000, which is accrued for in the balance sheet. 10. The company makes an accrual for 12,0 % holiday pay each month in 2022. Basis for this calculation is the fixed salary and the bonus 11. The company's National Insurance Contribution ("arbeidsgiveravgift") equals 14.1 % of the salaries and holiday pay. Basis for this calculation is the fixed salaries, the bonus, and the holiday . 12. Social security costs for the 2021 holiday pay are accrued for in the balance sheet per 31.12.2021 and carried forward to the opening balance of 03, 2022. 13. Budgeted depreciation is kr 12 000 per month 14. Budgeted rent, office and warehouse costs are kr 32 000 per month 15. Company cars and other travel costs are budgeted to kr 14 000 per month 16. Other budgeted payable operating costs amount to kr 10 000 per month. 17. The financial income and costs are insignificant. 18. Budgeted Payable taxes are 22,0 % of the budgeted profit 19. For the sake of simplification, Barbacoa's budgets disregard the effect of VAT. Hence, all the above figures are ex VAT. Question 1 (25%) in the attached Excel-file you will find the original budgeted income statement for 23, 2022, made back in December 2021, which concludes with a profit after taxes of kr 4 835 510 Due to changes in the company' plans and activities as well as macroeconomic changes, it is now time to revise the budpet and calculate the impact of eight different changes: 1. The company will launch a summer campaign together with the Nerdia Group. The average price per unit will be reduced to kr 2 600 per unit and it is expected this will increase the sales volume by 1 700 units. 2. The budgeted Internet sales is expected to increase to 2020 units. The total number of sold units will then increase from 8 600 units in the original budget to 10 600 units in the revised budget. 3. The bonus to the two Key Account Managers will now be 2.5% 4. The average USD rate is expected to be 8.90, both for purchases in Q3 and in previous periods. 5. Due to the increased shipping rates, the price for the barbecue grills will increase to USD 260.00 6. A new technical supervisor will start to work for the company on June 14, 2022. Her fixed salary will be kr 48 000 per month. She will work two full months in 03. per unit . 7. A new company car will be purchased for kr 480 000 and will be delivered and paid for early June. The car will be depreciated linearly over 10 years from June 2022, with an expected scrap value after 10 years of kr 40 000. 8. The company car costs will increase by kr 7 000 per month. Question 2 (25%) In the attached Excel-file you will find the original budgeted balance sheet for 03, 2022, made back in December 2021, which concludes with a total balance sum of kr 19 571 100 per 31* August 2022. Here is some additional information about the various balance sheet items: Inventory value: The opening balance consists of 5 800 barbeque grills. Accounts Receivable: The closing balance amounts to 1/3 of the total sales in 03, 2022 Accounts Payable: The closing balance amounts to 1/3 of the purchases of goods in Q3, 2022. Other payable costs are paid in the month they occur. Payable holiday pay: The opening balance consists of kr 594 000 in holiday pay earned in 2021 to be paid in July 2022 as well as accrued holiday pay for the first six months of 2022, kr 321 000. Payable social security costs: The opening balance consists of an accrual for social security costs of kr 82 000 for May. This will be paid on 15th July 2022 together with the social security costs of kr 85 000 for June. The closing balance consists of the remaining social security costs for Q3, to be paid on 15 September 2022. Make a revised budgeted balance sheet for 03, based on the information available, with new figures per 31 August 2022 for: Company cars Inventory Accounts Receivable Retained earnings Accounts Payable Payable holiday pay Payable social security costs Payable corporate tax For the balance of the bank deposit account per 31" August 2022 you should use the balance sheet equation . . . Budgeted income statement Q3, 2022: Sales price per unit: Nerdinand Reidar Sales price per unit Internet sales Total sales in units Sales through Nerdia-chain Sales through Reidar-chain Sales through own E-commerce platform Average purchase price in USD USD rate Average purchase price in NOK Corporate tax rate 200,00 3 950,00 8600 4300 2580 1 720 240,00 9,20 2 208,00 22,00 Sales income Costs of goods sold Gross margin Salaries Bonus to Key Account Managers Holiday pay Social security contribution Total salaries and personnel Depreciation Rent, office and warehouse costs Company cars and travel costs Other payable operating costs Total operating costs Budgeted profit before taxes 03. 2022 Payable taxes Budgeted profit before taxes Q3, 2022 26 746.000 18 988 800 7757 200 29,00% 810 000 249 400 127 128 167 300 1 353 828 36 000 96 000 42 000 30 000 204 000 6 199 372 1363 862 4 835 510 Budgeted balance sheet 03, 2022: Company cars Inventory Accounts Receivable Bank deposits Sum assets 01.06.2022 637200 1206 400 2716 900 5689 200 21249700 Change -36 000 -7507 200 6 198 433 -333833 -1 678 600 31.08.2022 601 200 5 299 200 8915 333 4 755 367 19571100 Share capital Premium fund Retained earnings Accounts Payable Payable holiday pay Payable social security costs Payable corporate tax Short-term loan from owners Sum equity and liabilities 240 000 1 530 000 7244100 6038 600 915000 82 000 0 5200000 21 249 700 0 0 4835 510 -2 211 400 -466872 300 1 363 862 -5 200 000 -1 678 600 240 000 1 530 000 12.079 610 3827200 448 128 82 300 1363 862 0 19 571 100 Budgeted cash flow budget Q3, 2022, indirect method: Budgeted profit before taxes 6199 372 Paid taxes Depreciation 36 000 Reduction of inventory 7507200 Increased Accounts Receivable -6 198 433 Redaced Accounts Payable -2 211 400 Relaced other short-term liabilities -5666 572 Net cash flow 03 -333833 63% + . . The Norwegian company Barbacoa AS Imports gas-heated barbeque grills from a manufacturer in China. The grills are distributed to Norwegian customers through three channels: the chain of hardware stores Nerdia, the chain of furniture stores Reldar, and from the company's own e commerce platform Barbacoa AS has six employees: The Managing Director, who also owns 30 % of the shares of the company. Two Key Account Managers, who are in changes of sales to Nerdia and Reidar. A Logistics Manager, who is responsible for the supply chain and warehouse. A Technical Manager, who handles the contact with the manufacturer as well as technical support to customers. An accountant who handles bookkeeping, payroll, and payments as well as having the responsibilities for the IT-Infrastructure and the E-commerce platform. Barbacoa's budget process is as follows: In November each year, the company makes activity plans for the forthcoming year. The demand for barbeque grills is highly seasonal, with more than 80% of the annual sales coming from the second and third quarter of the year. A Master Budget for the forthcoming calendar year is then made early December, with a budgeted income statement, a cash flow budget, and a budgeted balance sheet. The annual budgets are broken up in four quarterly budgets, to help the company to better follow up the seasonal variations in income and net cash flow. These quarterly budgets are often revised when new relevant information is available. The budgets for the third quarter of 2022 are now up for revision, due several things that have happened since the first version was made in December 2021. The original Q3 budgets were based on the following assumptions: 1. The company plans to purchase S 200 grills from their Chinese manufacturer. 2. The company expects a total sale of 8 600 grills. 3. The average purchase price charged by the manufacturer in Guangzhou Is USD 240.00 Including freight to Norwegian warehouse. The budgeted exchange rate is 1 USD = 9.20 NOK. This purchase price and exchange rate has also been used for purchases made in previous periods. 4. The sales are expected to be split as follows: Nerdia 50 %, Reldar 30 % and internet sales 20%. 5. Nerdia and Reidar pays on average kr 2 900 per grill, the Internet customers that order directly from the company pays kr 3 950. 6. Freight costs from Norweglan warehouse are paid by the customer 7. The monthly salaries are as follows: 1) Managing Director: kr 100 000 2) Key Account Managers: kr 65 000 each 3) Logistics Manager: kr 60 000 4) Technical Manager: kr 60 000 5) Accountant kr 55 000 8. In addition, the two Key Account Managers receives a bonus of 2.0 % of the orders to Nerdia and Reldar, 9. Instead of July salaries, the personnel are paid 12.0 % of their salaries in 2021 as holiday pay. This amounts to kr 518 000, which is accrued for in the balance sheet. 10. The company makes an accrual for 12,0 % holiday pay each month in 2022. Basis for this calculation is the fixed salary and the bonus 11. The company's National Insurance Contribution ("arbeidsgiveravgift") equals 14.1 % of the salaries and holiday pay. Basis for this calculation is the fixed salaries, the bonus, and the holiday . 12. Social security costs for the 2021 holiday pay are accrued for in the balance sheet per 31.12.2021 and carried forward to the opening balance of 03, 2022. 13. Budgeted depreciation is kr 12 000 per month 14. Budgeted rent, office and warehouse costs are kr 32 000 per month 15. Company cars and other travel costs are budgeted to kr 14 000 per month 16. Other budgeted payable operating costs amount to kr 10 000 per month. 17. The financial income and costs are insignificant. 18. Budgeted Payable taxes are 22,0 % of the budgeted profit 19. For the sake of simplification, Barbacoa's budgets disregard the effect of VAT. Hence, all the above figures are ex VAT. Question 1 (25%) in the attached Excel-file you will find the original budgeted income statement for 23, 2022, made back in December 2021, which concludes with a profit after taxes of kr 4 835 510 Due to changes in the company' plans and activities as well as macroeconomic changes, it is now time to revise the budpet and calculate the impact of eight different changes: 1. The company will launch a summer campaign together with the Nerdia Group. The average price per unit will be reduced to kr 2 600 per unit and it is expected this will increase the sales volume by 1 700 units. 2. The budgeted Internet sales is expected to increase to 2020 units. The total number of sold units will then increase from 8 600 units in the original budget to 10 600 units in the revised budget. 3. The bonus to the two Key Account Managers will now be 2.5% 4. The average USD rate is expected to be 8.90, both for purchases in Q3 and in previous periods. 5. Due to the increased shipping rates, the price for the barbecue grills will increase to USD 260.00 6. A new technical supervisor will start to work for the company on June 14, 2022. Her fixed salary will be kr 48 000 per month. She will work two full months in 03. per unit . 7. A new company car will be purchased for kr 480 000 and will be delivered and paid for early June. The car will be depreciated linearly over 10 years from June 2022, with an expected scrap value after 10 years of kr 40 000. 8. The company car costs will increase by kr 7 000 per month. Question 2 (25%) In the attached Excel-file you will find the original budgeted balance sheet for 03, 2022, made back in December 2021, which concludes with a total balance sum of kr 19 571 100 per 31* August 2022. Here is some additional information about the various balance sheet items: Inventory value: The opening balance consists of 5 800 barbeque grills. Accounts Receivable: The closing balance amounts to 1/3 of the total sales in 03, 2022 Accounts Payable: The closing balance amounts to 1/3 of the purchases of goods in Q3, 2022. Other payable costs are paid in the month they occur. Payable holiday pay: The opening balance consists of kr 594 000 in holiday pay earned in 2021 to be paid in July 2022 as well as accrued holiday pay for the first six months of 2022, kr 321 000. Payable social security costs: The opening balance consists of an accrual for social security costs of kr 82 000 for May. This will be paid on 15th July 2022 together with the social security costs of kr 85 000 for June. The closing balance consists of the remaining social security costs for Q3, to be paid on 15 September 2022. Make a revised budgeted balance sheet for 03, based on the information available, with new figures per 31 August 2022 for: Company cars Inventory Accounts Receivable Retained earnings Accounts Payable Payable holiday pay Payable social security costs Payable corporate tax For the balance of the bank deposit account per 31" August 2022 you should use the balance sheet equation . . . Budgeted income statement Q3, 2022: Sales price per unit: Nerdinand Reidar Sales price per unit Internet sales Total sales in units Sales through Nerdia-chain Sales through Reidar-chain Sales through own E-commerce platform Average purchase price in USD USD rate Average purchase price in NOK Corporate tax rate 200,00 3 950,00 8600 4300 2580 1 720 240,00 9,20 2 208,00 22,00 Sales income Costs of goods sold Gross margin Salaries Bonus to Key Account Managers Holiday pay Social security contribution Total salaries and personnel Depreciation Rent, office and warehouse costs Company cars and travel costs Other payable operating costs Total operating costs Budgeted profit before taxes 03. 2022 Payable taxes Budgeted profit before taxes Q3, 2022 26 746.000 18 988 800 7757 200 29,00% 810 000 249 400 127 128 167 300 1 353 828 36 000 96 000 42 000 30 000 204 000 6 199 372 1363 862 4 835 510 Budgeted balance sheet 03, 2022: Company cars Inventory Accounts Receivable Bank deposits Sum assets 01.06.2022 637200 1206 400 2716 900 5689 200 21249700 Change -36 000 -7507 200 6 198 433 -333833 -1 678 600 31.08.2022 601 200 5 299 200 8915 333 4 755 367 19571100 Share capital Premium fund Retained earnings Accounts Payable Payable holiday pay Payable social security costs Payable corporate tax Short-term loan from owners Sum equity and liabilities 240 000 1 530 000 7244100 6038 600 915000 82 000 0 5200000 21 249 700 0 0 4835 510 -2 211 400 -466872 300 1 363 862 -5 200 000 -1 678 600 240 000 1 530 000 12.079 610 3827200 448 128 82 300 1363 862 0 19 571 100 Budgeted cash flow budget Q3, 2022, indirect method: Budgeted profit before taxes 6199 372 Paid taxes Depreciation 36 000 Reduction of inventory 7507200 Increased Accounts Receivable -6 198 433 Redaced Accounts Payable -2 211 400 Relaced other short-term liabilities -5666 572 Net cash flow 03 -333833