You have a small business engaged in the retail sale of ladies and gentlemen's fashions. An accounting year-end is 31st December, and it is now 1st January 2024. Information included on the Statement of Financial Position at 31st December 2023 was as follows: Trade receivables (due to be received in January 2024) 11000 Trade receivables (due to be received in February 2024) 12000 Trade payables (due to be paid in January 2024) 4000 Closing inventories 5000 Cash at bank 37100 Share capital 16000 Retained profits/losses brought forward 41400 Dividend payable (due to be paid in January 2024) 2600 Taxation payable (due to be paid in January 2024) 1100 Shop fixtures and fittings at cost 50000 Depreciation on shop fixtures and fittings 25000 Long-term loan 25000 The shop fixtures and fittings are depreciated on a 25% straight-line basis and there is no scrap value. You are preparing a business plan for the following three months from January to March 2024. The plan will include a Cash Flow forecast, a forecast Income Statement and a forecast Statement of Financial Position. You predict the following: You rent out office space to another local business and receive 450 per month. Your motor vehicle running expenses will total 450 per month and are payable in the month in which they are incurred. Other expenses will be 2400 a month payable in the month in which they occur. You are going to buy a delivery van for the business in January at a cost of 17000 for cash. You will depreciate the van on a 20% straight-line basis. The scrap value of the van is expected to be 5000 at the end of its useful economic life. The tax charge for the three months to 31st March 2024 will be 9469 but this will not be paid until May 2024. A dividend of 960 was proposed to cover the three months, January to March 2024 but this will not be paid until April 2024. Interest on the bank loan is expected to be 125 a month. Closing inventory at 31st March 2024 is expected to be 7500. Marking Scheme: Questions 1-2: 13%, Question 3: 28%, Question 4: 29%, Question 5: 30%. Question 1 You predict that sales for January 2024 are expected to be 30000 increasing by 30% in February 2024 and by a further 11% in March 2024. Also, only 90% of your customers pay cash and the remaining 10% are given 2 month credit. Fill in the following table (Sales Working 1). All numbers must be entered as whole numbers. Enter "0" in a cell if, in any month, there are no sales. The same applies to cash sales receipts, credit sales receipts and trade receivables b/f. Sales W1 ('s) Jan Feb March Total Total Sales Cash sales receipts Credit sales receipts Trade receivables b/f Total cash receipts Question 2 In addition to the above information, you predict that purchases are expected to be 50% of sales and that you take on average 1 month credit from your suppliers. Fill in the following table (Purchases Working 2). All numbers must be entered as whole numbers. Enter "0" in a cell if, in any month, there are no credit purchases payments. The same applies to trade payables b/f. Purchases W2 ('s) Jan Feb March Total Total Purchases Credit purchases payments Trade payables b/f Total cash paid Question 3 Prepare a cash flow forecast for the three months to 31st March 2024. Enter "0" in a cell if, in any month, there are no cash receipts / cash payments. Trendy Clothing Ltd. Cash Flow Forecast for the three months period from 1 January to 31 March 2024 CASH IN / RECEIPTS ('s) Jan Feb March Total Sales W1 Rental Income Total Receipts CASH OUT / PAYMENT Revenue expenses Purchases W2 Dividend Other expenses Interest Motor Expenses Tax Van Total Payments Net Receipts Opening Balance Closing Balance Question 4 Prepare a forecast income statement for the three month period to 31st March 2024: Trendy Clothing Ltd. Forecast Income Statement for the three months from 1 January to 31 March 2024 Sales Revenue Less: Cost of Sales Opening Inventory Purchases Closing Inventory Gross Profit Other income Less Revenue Expenditure Other expenses Motor expenses Depreciation on fixtures and fittings Depreciation on van Total Revenue Expenditure Operating Profit (PBIT) Finance costs - Interest Paid Profit / Loss before tax Taxation Profit for the period Question 5 Prepare a forecast statement of financial position as at 31st March 2024: Trendy Clothing Ltd. Forecast Statement of Financial Position as at 31 March 2024 Non-Current Assets Net Book Value Fixtures & fittings Van Total Non-Current Assets Current Assets Inventory Trade Receivables Cash Total Current Assets Total Assets Equity Share Capital Retained profits/losses Total Equity Non-Current Liabilities Borrowings - Bank Loan Current Liabilities Trade payables Dividend payable Taxation Payable Total Current Liabilities Total Equity and Liabilities