UBFI Keith Whittaker Lecture 6: Cash flow, accruals and combination of three financial statements Keith Whitaker has a business supplying and erecting garden fencing. 22,180 in his business account at 31 December. He has He estimates his sales for January will be 5.800, rising to 6.550 in February 1 month's credit He is owed 2.580 by his customers for sales during the month of December. and EZ-100in March. 20% of sales are for cash, and 80% of customers receive He estimates that his purchases each month will be 50% of sales and he takes two months credit from his suppliers. He owes 1,470 to his trade suppliers for goods purchased in November and 1,340 for goods purchased in December. He has an outstanding telephone bill for 155 in relation to the previous quarter which he intends to pay in February. He expects bill for 190 in March for the first quarter, and he will pay it in April. to receive another telephone He is also planning to sell garden ornaments (for a friend) on a commission basis, and hopes to receive E300 January per month from this venture starting in He rents a storage space at 375 per month, payable at the end of each month. His transport expenses total 300 per month and are payable in the month in which they occur. Keith employees a part time worker and pays him 800 each month. in addition, he has miscellaneous expenses of 100 per month also payable in the month in which they occur Keith years' time. The loan incurs annual interests of 300 payable in instalments at the end of each month. owes 4,000 to the bank for a long-term interest only loan repayable in 2 He intends to purchase a new delivery van in January for 22,000. He estimates that the van will have a useful economic life of 5 years and a scrap value of 4,000 Keith has invested 13,295 (Share Capital) in the business, and has retained 6,000 worth of profits in the business (Retained Eamings)