A group of friends have formed a new business called Fashion Clothing, an online and mail order clothing business, in which they have invested 200,000 of their own capital They intend to manufacture and sell quality clothes They have set up the business and are selling direct to the final consumer, using a combination of aggressive marketing across a range of different media and also with the use of an automated Web site that accepts online orders To support this, they also have a department of telephone sales and support staff ready to help customers The sales staff work in teams and receive a basic salary plus commission for each successful sale By the start of July 20X5, they have spent 150,000 on tangible non current assets, and they currently have the remaining 50,000 in their business bank account They provide you with the following forecasted figures for their first 6 months of trading Sales for the next 6 months 1,350,000 Cost of the materials used up in sales 390,000 Labour costs for the 6 months 480,000 Other expenses for the 6 months, including marketing costs and 15,000 depreciation of tangible non current assets 345,000 Materials purchased during the 6 months 520,000 Their projected cash receipts and payments are estimated to be as follows Month (20X5) Sales Receipts Payments for Materials Labour and Other Expenses July 150,000 120,000 These payments are divided equally over each of the 6 months August 120,000 100,000 September 150,000 60,000 October 210,000 60,000 November 260,000 60,000 December 285,000 60,000 Totals 1,175,000 460,000 In addition to the above, they expect to have to pay a tax bill of 20,000 in December 20X5 and also plan to buy (and pay for) 30,000 additional tangible non current assets in that same month All transactions will go through their business bank account REQUIRED A projected statement of financial position for Fashion Clothing at the end of its first 6 months of operations A projected statement of cash flows for the first 6 months of trading and using the indirect method

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A group of friends have formed a new business called Fashion Clothing, an online and mail-order clothing business, in which they have invested 200,000 of

A group of friends have formed a new business called Fashion Clothing, an online and mail-order clothing business, in which they have invested 200,000 of their own capital. They intend to manufacture and sell quality clothes. They have set up the business and are selling direct to the final consumer, using a combination of aggressive marketing across a range of different media and also with the use of an automated Web site that accepts online orders. To support this, they also have a department of telephone sales and support staff ready to help customers. The sales staff work in teams and receive a basic salary plus commission for each successful sale. By the start of July 20X5, they have spent 150,000 on tangible non-current assets, and they currently have the remaining 50,000 in their business bank account.

They provide you with the following forecasted figures for their first 6 months of trading:


Sales for the next 6 months	1,350,000
Cost of the materials used up in sales	390,000
Labour costs for the 6 months	480,000
Other expenses for the 6 months, including marketing costs and 15,000 depreciation of tangible non-current assets	345,000
Materials purchased during the 6 months	520,000

Their projected cash receipts and payments are estimated to be as follows:

Month (20X5)	Sales Receipts	Payments for Materials	Labour and Other Expenses

July	150,000	120,000	These payments are divided equally over each of the 6 months.
August	120,000	100,000
September	150,000	60,000
October	210,000	60,000
November	260,000	60,000
December	285,000	60,000
Totals	1,175,000	460,000

In addition to the above, they expect to have to pay a tax bill of 20,000 in December 20X5 and also plan to buy (and pay for) 30,000 additional tangible non-current assets in that same month. All transactions will go through their business bank account.

REQUIRED:

A projected statement of financial position for Fashion Clothing at the end of its first 6 months of operations.

A projected statement of cash flows for the first 6 months of trading and using the indirect method.