question 1

a) Budget an income statement for the months of January, February and March 2018, with the following information i) Actual sales for the month of October November and December 2017 ii) Sales forecast for the month of January February and March 2018 iii) Cash sales are 30% and the balance are credit sales. For credit sales 60% of it will be collected in the next month and 20% of it will be collected two months after the sale, and the remaining 20% will be collected three months after the sale.

Month Sales (RM) October 80,000.00 November 90,000.00 December 110,000.00 January 120,000.00 February 130,000.00 March 150,000.00

iv) The purchase of raw material is predicted at 50% of sales and the payments will be made two months later v) Rentals are RM5 500 per month vi) Salaries are RM6 000 per month vii) The company will pay the building insurance premiums of RM3 800 will be paid in the month of February viii) The purchase of machinery involving a cost of RM60 000 will be made in the month of January ix) Opening cash balance for the month of January was RM20 000 x) The cash balance that the company intends to hold every month is RM15000.

question 2

The following balances are taken from the books of George Anderson at the end of his first year trading on 31 December 2014. Debit Credit 40000 18500 5100 1300 900 Sales Purchases Wages and salaries Repairs and maintenance Heating and lighting General expenses Insurance Cash at bank Cash in hand Trade receivables Trade payables Premises Fixtures and fittings Motor vehicle Capital at 1 January 2014 Drawings 1200 800 2200 1300 4100 3400 30000 10000 8000 52000 12000 95400 95400 The following additional information is available: Inventory at 31 December 2014 was valued at $4500 Required: (a) Prepare income statement for the year ended 31 December 2014 (b) Prepare a balance sheet as at 31 December 2014