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please answer a b c d Business Pla The directors of Baltic Engineering L.imited are preparing the business plan for the three December 2018. The
please answer a b c d
Business Pla The directors of Baltic Engineering L.imited are preparing the business plan for the three December 2018. The expected balance sheet at 30 September 2018 is as follows: onths ending 31 Draft Balance Sheet as at 30 September 2018 Fixed Assets Equipment 48,000 Aa'sCurrent Assets Stock Debtors 200,000 450,000 Current Liabilities sapeurs-U) Creditors 100,000 200.000 00,000 Bank Overdraft Net Current Assets Total Net Assets Capital and Reserves Share Capital Revenue Reserves 150,000 C shat te 100,000 98,000 198,000 The directors anticipate the following transactions during the next three months 1. New issue of 150,000 1 ordinary shares at par on 1 October 2018. 2. Sales and purchases on one month's credit as follows: Sales Purchases 300,000 100,000 Nov 360,000 120,000 480,000 160,000 Oct Cash out 3. All existing equipment will be replaced on 1 October at a cost of 80,000 and the old equipment will be sold for its net book value of 48,000 Labour costs as follows: 4. Oct Nov Dec 100,000 120,000 150,000 5. Overhead costs will be 660,000 per month for the foreseeable future. Note: Depreciation is charged at a rate of 20% per annum on cost. Due to the introduction of new stock contr measures there will be no change in stock levels over the three month period. Required (10 marks) (a) Prepare a cash budget for the three month period ending 31 December 2018 (b) Prepare the projected income statement for the three month period ending 31 December 2018. (5 marks) (5 marks) (c) Prepare the projected balance sheet as at 31 December 2018 (d) Advise the directors of Baltic Engineering Limited on the liquidity, profitability and solvency of the company for the next quarterStep by Step Solution
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