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Vince Jones, owner of Gadget Plus, had the following Statement of FinancialPosition as at March 3 1 , 2 0 2 3 :Non - Current
Vince Jones, owner of Gadget Plus, had the following Statement of FinancialPosition as at March :NonCurrent Assets $ $ $Motor Vehicles Furniture Current AssetsInventory Accounts receivable Bank Current LiabilitiesAccounts payable Fixed expenses accrued NonCurrent LiabilitiesLoan Financed by:Capital at April Net Loss Drawings The following information is provided to assist in preparing budgets for thefour months ended July : Sales revenue in February and March totalled $ for units soldand $ for units sold respectively. Projections for units to be sold fromApril to August are as follows:Apr May Jun Jul AugThe selling price per unit has been constant for the last five years, but it is expectedto increase by $ from April Gadget Plus also plans to change its creditarrangement from receipt two months after the sale, since it has been experiencinga high level of bad debts only of Februarys sales and of Marchssales were expected to be collectedFrom April, of the sales will be on credit, with ths of the creditcustomers making payments one month after the sale, to benefit from a cashdiscount. of the remaining debtors are not expected to settle their debts, butit is anticipated that all other amounts due will be collected two months after thesale.PLEASE TURN OVER Purchases are to be arranged so that closing inventory for April, May and Junewill be at the usual of the following months sales. The closing inventoryrequirement for July, however, will be of the following months sales, sinceit is expected that suppliers will increase the cost of purchasing each unit from$ to $ in August, of all purchases are for cash and the remainder are to be paid a month afterthe purchase. It is estimated that Gadget Plus will be granted a cash discount of$ for credit purchases payments made in the month of June.Gadget Plus will also incur a transportation cost of $ per unit purchased,payable as incurred In May, Vince Jones is expected to invest an additional $ into the businessand the monthly cash drawings will be increased by when compared to theprevious year In June, Vince Jones is expected to take inventory valued at $ for his ownpersonal use As an incentive to the salesman to reach the projected sales targets, Gadget Plusplans to introduce a commission of $ per unit sold to be paid for additionalsales in excess of units. This incentive will commence in April andcommission is to be paid one month after the sale Projected fixed expenses are to be incurred as follows: April $; May$; June $; July $ These are expected to be paid as follows: in the month incurred and in the following month Interest on the current loan is per annum, payable monthly. It is projectedthat Gadget plus will borrow an additional $ from a relative at a reducedinterest rate of per annum on June The first month will be interestfree, but monthly interest payments are to commence from July On July furniture costing $ will be purchased. A down payment of$ cash will be required and monthly payments of $ from August will bemade. Furniture is depreciated at a rate of per annum, straight line method An insurance premium for $ per annum will be paid in April A vehicle, original costing $ will be sold at a profit of $ on April The vehicle had a book value of $ at the time of sale. Depreciation onvehicles is per annum, reducing balance method The closing inventory at July is to be determined.PLEASE TURN OVERREQUIRED:a A Purchases Budget in units for the four months to July, marksb A Cash Budget for the four months ending July marksc A Budgeted Income Statement for the four months ending July marksd A Forecast Statement of Financial Position as at July marks : PM Fri Mar a tridentlearningmremotelearner.net Vince Jones, owner of Gadget Plus, had the following Statement of Financial Position as at March : NonCurrent Assets Motor Vehicles Furniture Current Assets Inventory Accounts receivable Bank Current Liabilities Accounts payable Fixed expenses accrued NonCurrent Liabilities Loan Financed by: Capital at April Net Loss Drawings table$$$
Vince Jones, owner of Gadget Plus, had the following Statement of FinancialPosition as at March :NonCurrent Assets $ $ $Motor Vehicles Furniture Current AssetsInventory Accounts receivable Bank Current LiabilitiesAccounts payable Fixed expenses accrued NonCurrent LiabilitiesLoan Financed by:Capital at April Net Loss Drawings The following information is provided to assist in preparing budgets for thefour months ended July : Sales revenue in February and March totalled $ for units soldand $ for units sold respectively. Projections for units to be sold fromApril to August are as follows:Apr May Jun Jul AugThe selling price per unit has been constant for the last five years, but it is expectedto increase by $ from April Gadget Plus also plans to change its creditarrangement from receipt two months after the sale, since it has been experiencinga high level of bad debts only of Februarys sales and of Marchssales were expected to be collectedFrom April, of the sales will be on credit, with ths of the creditcustomers making payments one month after the sale, to benefit from a cashdiscount. of the remaining debtors are not expected to settle their debts, butit is anticipated that all other amounts due will be collected two months after thesale.PLEASE TURN OVER Purchases are to be arranged so that closing inventory for April, May and Junewill be at the usual of the following months sales. The closing inventoryrequirement for July, however, will be of the following months sales, sinceit is expected that suppliers will increase the cost of purchasing each unit from$ to $ in August, of all purchases are for cash and the remainder are to be paid a month afterthe purchase. It is estimated that Gadget Plus will be granted a cash discount of$ for credit purchases payments made in the month of June.Gadget Plus will also incur a transportation cost of $ per unit purchased,payable as incurred In May, Vince Jones is expected to invest an additional $ into the businessand the monthly cash drawings will be increased by when compared to theprevious year In June, Vince Jones is expected to take inventory valued at $ for his ownpersonal use As an incentive to the salesman to reach the projected sales targets, Gadget Plusplans to introduce a commission of $ per unit sold to be paid for additionalsales in excess of units. This incentive will commence in April andcommission is to be paid one month after the sale Projected fixed expenses are to be incurred as follows: April $; May$; June $; July $ These are expected to be paid as follows: in the month incurred and in the following month Interest on the current loan is per annum, payable monthly. It is projectedthat Gadget plus will borrow an additional $ from a relative at a reducedinterest rate of per annum on June The first month will be interestfree, but monthly interest payments are to commence from July On July furniture costing $ will be purchased. A down payment of$ cash will be required and monthly payments of $ from August will bemade. Furniture is depreciated at a rate of per annum, straight line method An insurance premium for $ per annum will be paid in April A vehicle, original costing $ will be sold at a profit of $ on April The vehicle had a book value of $ at the time of sale. Depreciation onvehicles is per annum, reducing balance method The closing inventory at July is to be determined.PLEASE TURN OVERREQUIRED:a A Purchases Budget in units for the four months to July, marksb A Cash Budget for the four months ending July marksc A Budgeted Income Statement for the four months ending July marksd A Forecast Statement of Financial Position as at July marks
: PM Fri Mar
a
tridentlearningmremotelearner.net
Vince Jones, owner of Gadget Plus, had the following Statement of Financial Position as at March :
NonCurrent Assets
Motor Vehicles
Furniture
Current Assets
Inventory
Accounts receivable
Bank
Current Liabilities
Accounts payable
Fixed expenses accrued
NonCurrent Liabilities
Loan
Financed by:
Capital at April
Net Loss
Drawings
table$$$
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