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Accounting - A budgeting problem - Fun Run Enterprises

A budgeting problem - Fun Run Enterprises

Fun Run enterprises commenced business in 2002. The following budgeted
information for the year ending 30.6.2003 has been provided.

* total sales for the year is expected to be $400 000

* 40% of sales are for cash

* staff are expected to be paid $60 000 in salaries

* sales returns [1] are anticipated at $3000

* cost of goods sold is to be set at 60% of (gross) sales. All goods are
bought on credit

* creditors are paid

* stock loss is expected to be $2400

* stock on hand at 30.6.2003 is anticipated to be $34 000

* advertising $16 000

* cleaning $6000

* drawings $45 000

* loan repayment $10 000

* discount expense $500

* bad debts $2000

1.7.2002
30.6.2003

ASSETS
$
$

Bank
11 000
?

Stock
32 000
34 000

Prepaid advertising
1 500
2 000

Debtors
52 000
55 000

Machinery
80 000
80 000

less Accumulated depreciation
(4 000)
(12 000)

LIABILITIES

Creditors
20 000
22 000

Accrued salaries
4 400
4 100

Accrued interest

6 500

Loan
100 000
90 000

Owner's equity

Capital
?
?

* prepare a cash budget

* prepare a Profit and Loss statement (budgeted) - functional
classification [2]not required

* prepare a classified balance sheet

View the text document for solution to the Fun Run Enterprises budgeting
problem.

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Links:
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[1] http://alison.com/#
[2] http://alison.com/#