Prepare all the budgets like Sales Budget, Collection Budget, Purchase Budget, Payment Budget, Cash budget, Income Statement, Balance Sheet etc.
The ABC Company is a Tour Operator.
They are thinking about making an investment to improve the company.
In order to do that the company's chairman ask the staff to provide all the required information in order to elaborate a six month budget
That is, from January to June of the tax year N.
The balance presented to close the year was the following:
|
|
active
|
|
passive
|
|
Property/real estate
|
120000
|
Capital
|
60000
|
|
Accumulated amortization
|
-25000
|
|
|
|
Stock
|
0
|
profit
|
36000
|
|
Customers
|
30000
|
Long-term loan
|
0
|
|
Liquid assets
|
60000
|
dealers
|
35000
|
|
|
131000
|
|
131000
|
The operating account of the previous six months have been:
|
sales
|
432000
|
|
purchases
|
324000
|
|
Maintenance warehouse
|
25000
|
|
|
5833.33
|
|
Gross-margin
|
50166.67
|
|
Commercial expense
|
30000
|
|
Commercial amortization
|
1633.33
|
|
Administration and stationery
|
15000
|
|
EBT1
|
3533.34
|
|
Financial expense
|
|
|
EBT
|
3533.34
|
|
Net
|
3533.34
|
The sales department provides us with the following information:
After examining the historical data base of the sales of the last four tax years, and applying the adequate econometrical techniques, they conclude that the estimated sales for the next seven months are:
January - 2000 euros
February - 3000 euros
March - 4000 euros
April - 5000 euros
May - 6000 euros
June - 7000 euros
July - 5000 euros
-the average price of sale is quantified in 16euros per unit
-historically, and they think this is not going to change, the sales revenue consist of: 50% upfront payments, 30% 30 days-extended payment and 20% 60 days-extended payment.
-customers of the previous year, debtors (30000 euros), will be earned 15000 in January and 15000 in February.
The commercial department inform us that to reach the sales as in the budget, they need the following infrastructure, hiring two free lance salesmen who cost monthly 2500 each. This cost is fixed.
The previous year dealers, 35000 tot., have to be paid 25000 in January and the remaining 10000 in February.
They make the purchase as required by the sales, the purchase price is 12euros and the transport price is included. The payment is 30 days extended.
Finally, the administration and management department need to maintain this monthly structure:
-rent of the warehouse: 9000euros per month;
-administration office, staff and material: 2500euros per month
They are all fixed costs.
The property is:
-100 thousand euros are installations of the warehouse and they will pay them off in 10years;
-20 thousand euros are 2 vehicles of the salesmen which will be amortized in 7 years.
They are fixed costs.