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BSBESB403 : Topic 6 Budgetting . pdf

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BSBESB403 Plan Finances for New Business Ventures Session 6 – Budgeting This Photo by Unknown Author is licensed under CC BY-SA
OFFICIAL Working Capital Cycle  The process involved in transforming firm input into revenue.  Also known as Operating Cycle  Typically, Manufacturers have the longest operating cycle whereas Service entities have the shortest https://www.omega-performance.com/the-importance-of-the-operating-cycle-in-understanding-a- businesss-story/operating-cycle/
OFFICIAL Role of Budgets The role of budgets depends on the type of organization. They normally include:  Tool for Planning  Tool for Control  Tool for Organising  Tool for Motivation Input Data Projected Future Cost Take corrective action Plan of Action Actual Future Cost Variances Historical Cost Future Cost Estimate Formulate Compute Evaluate Monitor Planning Control
OFFICIAL Types of Budgets Common budgets for small businesses  Static Budget (Fixed Budget) – a budget that does not change regardless of the fluctuations and changes in the business operations.  Master Budget – shows the whole picture of the company. This is the portfolio of all the company’s budgets.  Financial Budget – company’s strategy for asset, income, cash flow and expense management. Includes operating and cash flow budgets.  Operating Budget – contains business income and expenses over a specific range of time  Cash Flow Budget – analysis and forecasting of inflow and outflow of cash Budgets aid businesses in  Tracking resources  Envisioning various scenarios  Maximising efficiency
OFFICIAL Factors that affect Forecasts  Secular Trend Movement – underlying direction of data (i.e. increasing, decreasing or remaining constant). Normally influenced by:  Population Changes  Productivity Improvement  Technological Changes  Market Changes  Cyclical Movement – a pattern that is repeated over periods of different time lengths (i.e. recession, recovery, prosperity, etc)  Seasonal Movement – fluctuations that repeat themselves each year (i.e. goods with high demands on Valentines Day, Mother’s Day, Christmas Day etc.)  Irregular Movements – uncontrollable, random variations that impact greatly on the level of business activity (weather patterns, calamities, market and currency value fluctuations, changes in the political climate and industry changes
OFFICIAL Forecasting vs Budgeting Forecasting  Estimates the company’s future financial outcomes by examining historical data  Used to determine how companies should allocate their budgets  Does not analyse variances  Regularly updated and can be used by management to make immediate actions Budgeting  An outline of expectations  Estimates revenues and expenses  Includes  Expected cashflows  Expected debt-reduction  A budget is compared to actual results to calculate variances https://www.investopedia.com/ask/answers/042215/whats-difference-between-budgeting-and-financial-forecasting.asp#:~:text=%20Budgeting%20vs.%20Financial%20Forecasting%3A%20What%27s%20the%20Difference%3F,wants%20to%20take%20the%20company.%20A...%20More%20
OFFICIAL Common Types of Budgets  Revenue Budgets  Sales Budgets  Sales Budgets by Product  Sales Budget by Period  Sales Budgets by Area  Fee/Income Budget  Operating Budgets  Purchases Budget for Retail Business  Cost of Sales  Cost of Goods Sold  Expenses Budget  Financial Performance Budget  Cash Budgets  GST and Cash Budgets  Discount Allowed and Bad Debts  Items Subject to GST  Accounts Receivable Collections Budget  Cash Receipts Budget  Cash Payments Budgets
OFFICIAL Sales and Purchases Budget Wattle Ltd. produces a single product. Based on the Cost and Revenue details given, you will need to prepare the following:  A projected profit statement at a sales level of 24,000 units.  A purchases budget where the closing stock is set at 50% of monthly sales Selling Price $75 per unit 100% Variable Cost $45 per unit 60% Contribution Margin $30 per unit 40% Total Fixed Cost $720,000 per annum
OFFICIAL Sales and Purchases Budget  A projected profit statement at a sales level of 24,000 units. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss.
OFFICIAL Sales and Purchases Budget  Purchases Budget with Closing Stock is 50% of monthly sales. (Please note that Opening Stock was carried over from the previous month. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss. Purchase Budget for January Budget Sales ($) Budget Cost of Sales ($) Add: Closing Stock ($) Available ($) Less: Opening Stock ($) 45,000.00 Required Purchases ($) Required Purchases (units)
OFFICIAL Sales and Purchases Budget  Purchases Budget with Closing Stock is 50% of monthly sales. (Please note that Opening Stock was carried over from the previous month. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss. Purchase Budget for January Budget Sales ($) 1,800,000.00 Budget Cost of Sales ($) 1,080,000.00 Add: Closing Stock ($) 900,000.00 Available ($) 1,980,000.00 Less: Opening Stock ($) 45,000.00 Required Purchases ($) 1,935,000.00 Required Purchases (units) 43,000
OFFICIAL Budgeted Income Statement and Cashflows The following is a budget prepared by Red Back Ltd (Cash Basis) for the 3 months ending 31 March. Changes in April are:  Fees received are expected to fall by 10%  Wages will rise by 1%  All other expenses will rise by 5% Complete a budgeted Income Statement and Cash Flows for April. Assume that the owners draws $40,000 from the bank account monthly. Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00
OFFICIAL Budgeted Income Statement and Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 Payments: Wages 12,000.00 Office Expenses 4,800.00 Equipment Expenses 2,600.00 Motor Vehicle Expenses 5,000.00 Advertising 10,000.00 Other 3,000.00 Total Payments 37,400.00 Profit 62,600.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
OFFICIAL Budgeted Income Statement and Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 Payments: Wages 12,000.00 120.00 Office Expenses 4,800.00 240.00 Equipment Expenses 2,600.00 130.00 Motor Vehicle Expenses 5,000.00 250.00 Advertising 10,000.00 500.00 Other 3,000.00 150.00 Total Payments 37,400.00 1,390.00 Profit 62,600.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
OFFICIAL Budgeted Income Statement and Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 $ 90,000.00 Payments: Wages 12,000.00 120.00 12,120.00 Office Expenses 4,800.00 240.00 5,040.00 Equipment Expenses 2,600.00 130.00 2,730.00 Motor Vehicle Expenses 5,000.00 250.00 5,250.00 Advertising 10,000.00 500.00 10,500.00 Other 3,000.00 150.00 3,150.00 Total Payments 37,400.00 1,390.00 38,790.00 Profit 62,600.00 $ 51,210.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
OFFICIAL Budgeted Income Statement and Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 $ 90,000.00 Payments: Wages 12,000.00 120.00 12,120.00 Office Expenses 4,800.00 240.00 5,040.00 Equipment Expenses 2,600.00 130.00 2,730.00 Motor Vehicle Expenses 5,000.00 250.00 5,250.00 Advertising 10,000.00 500.00 10,500.00 Other 3,000.00 150.00 3,150.00 Total Payments 37,400.00 1,390.00 38,790.00 Profit 62,600.00 $ 51,210.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 $ 18,790.00 Add: Receipts 100,000.00 90,000.00 Equals Cash Available 96,190.00 108,790.00 Less: Payments 37,400.00 38,790.00 Less: Owner's Withdrawal 40,000.00 40,000.00 Closing Cash Balance 18,790.00 30,000.00
OFFICIAL Create your own budget In relation to your own business or business idea: Formulate a projected/budgeted Income Statement (Cash Basis) and Cash Flows for the 1st 3 months (1st Quarter) of operations.

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BSBESB403 : Topic 6 Budgetting . pdf

  • 1.
    BSBESB403 Plan Financesfor New Business Ventures Session 6 – Budgeting This Photo by Unknown Author is licensed under CC BY-SA
  • 2.
    OFFICIAL Working Capital Cycle The process involved in transforming firm input into revenue.  Also known as Operating Cycle  Typically, Manufacturers have the longest operating cycle whereas Service entities have the shortest https://www.omega-performance.com/the-importance-of-the-operating-cycle-in-understanding-a- businesss-story/operating-cycle/
  • 3.
    OFFICIAL Role of Budgets Therole of budgets depends on the type of organization. They normally include:  Tool for Planning  Tool for Control  Tool for Organising  Tool for Motivation Input Data Projected Future Cost Take corrective action Plan of Action Actual Future Cost Variances Historical Cost Future Cost Estimate Formulate Compute Evaluate Monitor Planning Control
  • 4.
    OFFICIAL Types of Budgets Commonbudgets for small businesses  Static Budget (Fixed Budget) – a budget that does not change regardless of the fluctuations and changes in the business operations.  Master Budget – shows the whole picture of the company. This is the portfolio of all the company’s budgets.  Financial Budget – company’s strategy for asset, income, cash flow and expense management. Includes operating and cash flow budgets.  Operating Budget – contains business income and expenses over a specific range of time  Cash Flow Budget – analysis and forecasting of inflow and outflow of cash Budgets aid businesses in  Tracking resources  Envisioning various scenarios  Maximising efficiency
  • 5.
    OFFICIAL Factors that affectForecasts  Secular Trend Movement – underlying direction of data (i.e. increasing, decreasing or remaining constant). Normally influenced by:  Population Changes  Productivity Improvement  Technological Changes  Market Changes  Cyclical Movement – a pattern that is repeated over periods of different time lengths (i.e. recession, recovery, prosperity, etc)  Seasonal Movement – fluctuations that repeat themselves each year (i.e. goods with high demands on Valentines Day, Mother’s Day, Christmas Day etc.)  Irregular Movements – uncontrollable, random variations that impact greatly on the level of business activity (weather patterns, calamities, market and currency value fluctuations, changes in the political climate and industry changes
  • 6.
    OFFICIAL Forecasting vs Budgeting Forecasting Estimates the company’s future financial outcomes by examining historical data  Used to determine how companies should allocate their budgets  Does not analyse variances  Regularly updated and can be used by management to make immediate actions Budgeting  An outline of expectations  Estimates revenues and expenses  Includes  Expected cashflows  Expected debt-reduction  A budget is compared to actual results to calculate variances https://www.investopedia.com/ask/answers/042215/whats-difference-between-budgeting-and-financial-forecasting.asp#:~:text=%20Budgeting%20vs.%20Financial%20Forecasting%3A%20What%27s%20the%20Difference%3F,wants%20to%20take%20the%20company.%20A...%20More%20
  • 7.
    OFFICIAL Common Types ofBudgets  Revenue Budgets  Sales Budgets  Sales Budgets by Product  Sales Budget by Period  Sales Budgets by Area  Fee/Income Budget  Operating Budgets  Purchases Budget for Retail Business  Cost of Sales  Cost of Goods Sold  Expenses Budget  Financial Performance Budget  Cash Budgets  GST and Cash Budgets  Discount Allowed and Bad Debts  Items Subject to GST  Accounts Receivable Collections Budget  Cash Receipts Budget  Cash Payments Budgets
  • 8.
    OFFICIAL Sales and PurchasesBudget Wattle Ltd. produces a single product. Based on the Cost and Revenue details given, you will need to prepare the following:  A projected profit statement at a sales level of 24,000 units.  A purchases budget where the closing stock is set at 50% of monthly sales Selling Price $75 per unit 100% Variable Cost $45 per unit 60% Contribution Margin $30 per unit 40% Total Fixed Cost $720,000 per annum
  • 9.
    OFFICIAL Sales and PurchasesBudget  A projected profit statement at a sales level of 24,000 units. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss.
  • 10.
    OFFICIAL Sales and PurchasesBudget  Purchases Budget with Closing Stock is 50% of monthly sales. (Please note that Opening Stock was carried over from the previous month. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss. Purchase Budget for January Budget Sales ($) Budget Cost of Sales ($) Add: Closing Stock ($) Available ($) Less: Opening Stock ($) 45,000.00 Required Purchases ($) Required Purchases (units)
  • 11.
    OFFICIAL Sales and PurchasesBudget  Purchases Budget with Closing Stock is 50% of monthly sales. (Please note that Opening Stock was carried over from the previous month. Projected Profit Statement for January Cost per Unit Quantity January Sales Revenue $ 75.00 24,000 $ 1,800,000.00 Less: Variable Cost $ 45.00 24,000 1,080,000.00 Contribution Margin $ 30.00 24,000 720,000.00 Less: Fixed Costs 720,000.00 Net Profit - No Income, no loss. Purchase Budget for January Budget Sales ($) 1,800,000.00 Budget Cost of Sales ($) 1,080,000.00 Add: Closing Stock ($) 900,000.00 Available ($) 1,980,000.00 Less: Opening Stock ($) 45,000.00 Required Purchases ($) 1,935,000.00 Required Purchases (units) 43,000
  • 12.
    OFFICIAL Budgeted Income Statementand Cashflows The following is a budget prepared by Red Back Ltd (Cash Basis) for the 3 months ending 31 March. Changes in April are:  Fees received are expected to fall by 10%  Wages will rise by 1%  All other expenses will rise by 5% Complete a budgeted Income Statement and Cash Flows for April. Assume that the owners draws $40,000 from the bank account monthly. Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00
  • 13.
    OFFICIAL Budgeted Income Statementand Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 Payments: Wages 12,000.00 Office Expenses 4,800.00 Equipment Expenses 2,600.00 Motor Vehicle Expenses 5,000.00 Advertising 10,000.00 Other 3,000.00 Total Payments 37,400.00 Profit 62,600.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
  • 14.
    OFFICIAL Budgeted Income Statementand Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 Payments: Wages 12,000.00 120.00 Office Expenses 4,800.00 240.00 Equipment Expenses 2,600.00 130.00 Motor Vehicle Expenses 5,000.00 250.00 Advertising 10,000.00 500.00 Other 3,000.00 150.00 Total Payments 37,400.00 1,390.00 Profit 62,600.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
  • 15.
    OFFICIAL Budgeted Income Statementand Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 $ 90,000.00 Payments: Wages 12,000.00 120.00 12,120.00 Office Expenses 4,800.00 240.00 5,040.00 Equipment Expenses 2,600.00 130.00 2,730.00 Motor Vehicle Expenses 5,000.00 250.00 5,250.00 Advertising 10,000.00 500.00 10,500.00 Other 3,000.00 150.00 3,150.00 Total Payments 37,400.00 1,390.00 38,790.00 Profit 62,600.00 $ 51,210.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 Add: Receipts 100,000.00 Equals Cash Available 96,190.00 Less: Payments 37,400.00 Less: Owner's Withdrawal 40,000.00 Closing Cash Balance 18,790.00
  • 16.
    OFFICIAL Budgeted Income Statementand Cashflows Budgeted Income Statement January February March Total Receipts: Fees Received $ 80,000.00 $ 90,000.00 $100,000.00 $270,000.00 Payments: Wages 10,000.00 11,000.00 12,000.00 33,000.00 Office Expenses 4,000.00 4,200.00 4,800.00 13,000.00 Equipment Expenses 2,200.00 2,400.00 2,600.00 7,200.00 Motor Vehicle Expenses 5,800.00 5,200.00 5,000.00 16,000.00 Advertising 8,000.00 9,000.00 10,000.00 27,000.00 Other 3,400.00 3,600.00 3,000.00 10,000.00 Total Payments 33,400.00 35,400.00 37,400.00 106,200.00 Profit 46,600.00 54,600.00 62,600.00 163,800.00 Budgeted Cash Flows Opening Cash Balance -$ 25,010.00 -$ 18,410.00 -$ 3,810.00 -$ 25,010.00 Add: Receipts 80,000.00 90,000.00 100,000.00 270,000.00 Equals Cash Available 54,990.00 71,590.00 96,190.00 244,990.00 Less: Payments 33,400.00 35,400.00 37,400.00 106,200.00 Less: Owner's Withdrawal 40,000.00 40,000.00 40,000.00 120,000.00 Closing Cash Balance - 18,410.00 - 3,810.00 18,790.00 18,790.00 Budgeted Income Statement March Expected Change April (Budgeted) Receipts: Fees Received $100,000.00 -$ 10,000.00 $ 90,000.00 Payments: Wages 12,000.00 120.00 12,120.00 Office Expenses 4,800.00 240.00 5,040.00 Equipment Expenses 2,600.00 130.00 2,730.00 Motor Vehicle Expenses 5,000.00 250.00 5,250.00 Advertising 10,000.00 500.00 10,500.00 Other 3,000.00 150.00 3,150.00 Total Payments 37,400.00 1,390.00 38,790.00 Profit 62,600.00 $ 51,210.00 Budgeted Cash Flows Opening Cash Balance -$ 3,810.00 $ 18,790.00 Add: Receipts 100,000.00 90,000.00 Equals Cash Available 96,190.00 108,790.00 Less: Payments 37,400.00 38,790.00 Less: Owner's Withdrawal 40,000.00 40,000.00 Closing Cash Balance 18,790.00 30,000.00
  • 17.
    OFFICIAL Create your ownbudget In relation to your own business or business idea: Formulate a projected/budgeted Income Statement (Cash Basis) and Cash Flows for the 1st 3 months (1st Quarter) of operations.