Jan Sandwich is a wholesaler to the hospitality industry. Her business supplies gourmet lunch items to cafes in her local district. She operates as a sole trader under the name Lunchbox.

Most sales are cash; credit is offered to two long-term customers only. Suppliers have all extended credit to Lunchbox.

Lunchbox is not registered for GST.

Lunchbox
Balance Sheet as at 31 March
Current Assets
Accounts Receivable		$1800
Cash at Bank		$10000
Inventory		$700	$12500
Non-Current Assets
Plant and Equipment (at cost)	$40000
Accumulated Depreciation on Plant and Equipment	$12000	$28000
Office Equipment (at cost)	$25000
Accumulated Depreciation on Office Equipment	$11000	$14000	$42000
Total Assets			$54500
Current Liabilities
Accounts Payable		$2728
Non-Current Liabilities
5% Loan (due in 2 years)		$15000
Total Liabilities			$17728
Net Assets			$36772
Proprietors Equity
Capital			$22000
Accumulated Profits			$14772
			$36772

Additional Info

Sales (in $)
Actual
	January	5500
	February	5600
	March	5650
Forecast
	April	5820
	May	5900
	June	6100
	July	6200

• Total Sales comprise 80% cash sales and 20% credit sales.
• Invoices for credit sales are sent on the last day of the month of sale.
• Experience reveals the following pattern of debtors' collections: 50% pay within one month of invoice date, 40% pay in the second month after sale, 10% pay in the third month after invoice date.

Purchase Inventory:

• Closing inventory for each should represent 20% of the next month's sales in units (i.e. 20% of the next month's COGS).
• The averge markup on cost is 70%
• All purchases are on credit and are paid in the month following the purchase.
• Other Revenue: Interest received each month averages $10.00

Operating expenses (all cash except Depreciation)

• Administration costs (excluding depreciation and rates) represent 12% of each month's purchases and are paid in the month in which they are incurred.
• Depreciation is charged to the accounts at the rate of: Plant and equipment (marketing expense) 15% per year on cost, Office equipment 10% per year on cost.
• Marketing costs represent 6% of each month's sales and are paid in the month in which they occurred.
• Loan interest is paid at the end of each month at the rate of 5% per year. (The loan is an interest only loan with the principal due in 2 years).
• Rent (commercial) 0f $600 is paid at the beginning of each month.

1. Prepare month-by-month budgets for the three months ending 30 June:

• Sales Budget
• Purchases Budget
• Cost of Goods Sold Budget
• Expenses Budget
• Cash Receipts Budget
• Cash Payments Budget
• Casg Budget

1. Prepare the following repors:

• Income Statement for the quarter.
• Balance Sheet as at 30 June.

Sales Budget:

			April	May	June	Quarter
Total Sales
Cash Sales
Credit Sales

Purchases Budget:

	April	May	June	Quarter
Cost of Sales for the month
Add ending inventories
Goods Available
Less Opening inventories
Total Purchases

Cost of Goods Sold Budget:

	April	May	June	Quarter
Opening Stock
Add Purchases
Goods Available
Less Closing Stock
Cost of Goods Sold

Interest Revenue Budget:

	April	May	June	Quarter
Interest

Expenses Budget:

	April	May	June	Quarter
Marketing
Administration Expenses
Financial Expenses
TOTAL EXPENSES

Cash Receipts Budget:

	April	May	June	Quarter
Month 1
Month 2
Month 3
Cash Sales
Interest revenue
Total Cash Receipts
Accounts Receivable (opening)
Accounts Receivable (ending)

Cash Payments Budget:

	April	May	June	Quarter
Accounts Payable
Marketing and Distribution Exps
Administration Expenses
Rent
Loan interest
Total Cash Payments
Accounts Payable (opening)
Accounts Payable (ending)

Cash Budget:

	April	May	June
Opening Balance
Add Cash Receipts
Cash Available
Less Cash Payments
Closing Bank Balance