Calculate for each month the company's net sales income (1), cost of goods sold (2) and the closing balance of the inventory (3).
(1) The net sales income consists of the budgeted sales, less credit invoices due to customer returns and the sales income from re-selling the returned goods.
(2) Based on the 80% mark-up pricing policy
(3) Based on the cost of goods sold and the monthly change of inventory. You may disregard the fact that the company at the end of the year will have returned goods from December to be sold in January 2024
SuperNova AS was established January 2,2023 , and the company's opening balance looked as follows after Axel and Susie, who owns 50 per cent each, had privately covered the registration costs for the company: The financial planning is based on information retrieved from the company's business plan: 1. In January 2023, an investment of kr 500000 will be made to cover the costs for the company's Internet site. Since the expected economic life of this asset is less than three years, the investment will not be capitalized and depreciated, but taken to cost immediately. 2. There will be a kr 150000 deposit for the warehouse rent, to be paid in January 2023. 3. SuperNova uses a cost-based pricing model, with a mark-up (profit on top of purchase price including freight to Norway) of 80 per cent, before Value Added Tax. 4. The company has a free 30-day return policy and expects that as much as 20 per cent of the goods will be returned, measured in terms of sales revenue. The returned goods cannot be sold at full prices and will be offered to a discount outlet store for half of the original sticker price, the month after they have been returned to SuperNova. 5. For the sake of simplification, we assume that the goods arrive in Norway the same month they are ordered and that they are also paid this month. 6. The customers pay with debit/credit cards when the goods are purchased, and they also pay the freight costs in full. 7. Marketing activities take place on various social media platforms and the company plans in this respect to spend monthly kr50000 in Q1 and Q2 and kr 100000 per month in Q3 and Q4. These costs are paid the same month as they occur. 8. The other operational costs are expected to be kr25000 per month in Q1, kr 30000 per month in Q2, and kr35000 per month for the rest of 2023 . These costs are also paid the same month as they occur. 9. Axel and Susie are uncertain about how much to budget for their own salaries and other personnel costs. The goal is to have a budgeted monthly rate of return on sales of 5 per cent after salaries and other personnel costs. Hence, the budget must be used to determine the level of the monthly salaries and other personnel costs. For the sake of simplicity, we can assume that all of these costs are paid the same month as they occur. The sales and purchase budgets for 2023 are as follows (all figures ex VAT): The above figures do not include the returned goods and the revenues from selling them for the second time at a discounted price, ref. point 4 above. SuperNova AS was established January 2,2023 , and the company's opening balance looked as follows after Axel and Susie, who owns 50 per cent each, had privately covered the registration costs for the company: The financial planning is based on information retrieved from the company's business plan: 1. In January 2023, an investment of kr 500000 will be made to cover the costs for the company's Internet site. Since the expected economic life of this asset is less than three years, the investment will not be capitalized and depreciated, but taken to cost immediately. 2. There will be a kr 150000 deposit for the warehouse rent, to be paid in January 2023. 3. SuperNova uses a cost-based pricing model, with a mark-up (profit on top of purchase price including freight to Norway) of 80 per cent, before Value Added Tax. 4. The company has a free 30-day return policy and expects that as much as 20 per cent of the goods will be returned, measured in terms of sales revenue. The returned goods cannot be sold at full prices and will be offered to a discount outlet store for half of the original sticker price, the month after they have been returned to SuperNova. 5. For the sake of simplification, we assume that the goods arrive in Norway the same month they are ordered and that they are also paid this month. 6. The customers pay with debit/credit cards when the goods are purchased, and they also pay the freight costs in full. 7. Marketing activities take place on various social media platforms and the company plans in this respect to spend monthly kr50000 in Q1 and Q2 and kr 100000 per month in Q3 and Q4. These costs are paid the same month as they occur. 8. The other operational costs are expected to be kr25000 per month in Q1, kr 30000 per month in Q2, and kr35000 per month for the rest of 2023 . These costs are also paid the same month as they occur. 9. Axel and Susie are uncertain about how much to budget for their own salaries and other personnel costs. The goal is to have a budgeted monthly rate of return on sales of 5 per cent after salaries and other personnel costs. Hence, the budget must be used to determine the level of the monthly salaries and other personnel costs. For the sake of simplicity, we can assume that all of these costs are paid the same month as they occur. The sales and purchase budgets for 2023 are as follows (all figures ex VAT): The above figures do not include the returned goods and the revenues from selling them for the second time at a discounted price, ref. point 4 above
