Manage budgets and forecasts
Question: 1 - Preparing a Flexible Budget
The owner of a new consultancy called Speedo Pty Ltd asked you to prepare the master budget for them. The consultancy consists of the owner who charges out at $68 per hour and the junior staff who charges out at $42 per hour. The owner has advised you that forecast hour for each quarter as below.
The consultancy has a credit system of payments with 60% of payment received the quarter in which they are earned and the remaining 40% earned the following month. The opening accounts receivable is $13,200 incl GST. The GST is accounted for on an accrual basis.
Part A
Prepare a quarterly revenue receipts forecast and cash collections forecast for the next financial year.
Hours September December March June
Senior 250 230 230 230
Junior 210 220 210 220
Speedo Pty LtdCash collections Forecast
Notes if needed.
Part B
The owner will purchase a new vehicle in the September quarter for $27,500. In December they will purchase photocopiers for $5,500 and a computer system for $5,500 with an upgrade in March for a further $2,750. Each item is inclusive of GST.
|
2013
|
Sep
|
Dec
|
Mar
|
Jun
|
|
Motor vehicle
|
1,300
|
1,495
|
300
|
450
|
|
Printing
|
200
|
50
|
200
|
50
|
|
Electricity
|
600
|
555
|
500
|
500
|
|
Rent
|
4,500
|
4,500
|
4,500
|
4,500
|
Prepare the Capital Expense Budget for the financial year.
Part C
Depreciation is $700 per quarter and tax payable at 30% of net profit per quarter. Wages for the senior staff are $8,000 per quarter and junior $5,000 who receive a $1,000 bonus in June depending on the performance of the junior staff and the financial performance of the business.
Complete the expense budget, budgeted statement of financial performance: you will need to add the non-GST items to the expense budget, and the cash flow budget, which has an opening cash balance of $42,000. The opening GST liability is $2,000 and the opening PAYG tax instalment is $2,500.
Speedo Pty Ltd Budget statement of financial performance @30.6.2013
Speedo Pty Ltd GST Budget @30th June 2015
Speedo Pty Ltd Budget statement of cash flows @30th June 2015
Part D
Use the cash budget to prepare a graph of quarterly revenue received, payments made and closing cash position