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SECTION B: ANSWER ALL PARTS OF THE QUESTION QUESTION B1 Noodle V Ltd start business at the 1st of Jan 2021 with share capital of £110,000. They also take a long-term loan of £160,000 and commitment to pay equally £6,900 each month (include interest). The loan interest for the first quarter is £6,000. Sale are expected to be as follows: 60% of sale are for cash. The remainder of sales will be collected 1 month later. To beginning business, Noodle V buy £108,000 and pay 100% in January. Further inventory is purchased at 50% of sales each month. Suppliers are paid 1 month later. The closing inventory should be £135,000. Wages are forecasted to be £20,000 per month, payable in the month they are incurred. Overheads excluding depreciation are forecast to be £40,000 per month and paid in the month they are incurred. Required: Jan Feb Mar Rent is £60,000 per year payable annually in advance. Equipment will be depreciated at 10% of cost per year and company will spend £150,000 on equipment. a) £240,000 £260,000 £300,000 b) c) Forecast Monthly Cash Flow Statement for the first quarter 2021. Forecast Income Statement for the period ending 31th March 2021. Forecast Statement of Financial Position as at the 31th March 2021. 11

SECTION B: ANSWER ALL PARTS OF THE QUESTION QUESTION B1 Noodle V Ltd start business at the 1st of Jan 2021 with share capital of £110,000. They also take a long-term loan of £160,000 and commitment to pay equally £6,900 each month (include interest). The loan interest for the first quarter is £6,000. Sale are expected to be as follows: 60% of sale are for cash. The remainder of sales will be collected 1 month later. To beginning business, Noodle V buy £108,000 and pay 100% in January. Further inventory is purchased at 50% of sales each month. Suppliers are paid 1 month later. The closing inventory should be £135,000. Wages are forecasted to be £20,000 per month, payable in the month they are incurred. Overheads excluding depreciation are forecast to be £40,000 per month and paid in the month they are incurred. Required: Jan Feb Mar Rent is £60,000 per year payable annually in advance. Equipment will be depreciated at 10% of cost per year and company will spend £150,000 on equipment. a) £240,000 £260,000 £300,000 b) c) Forecast Monthly Cash Flow Statement for the first quarter 2021. Forecast Income Statement for the period ending 31th March 2021. Forecast Statement of Financial Position as at the 31th March 2021. 11

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...
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SECTION B: ANSWER ALL PARTS OF THE QUESTION QUESTION B1 Noodle V Ltd start business at the 1st of Jan 2021 with share capital of £110,000. They also take a long-term loan of £160,000 and commitment to pay equally £6,900 each month (include interest). The loan interest for the first quarter is £6,000. Sale are expected to be as follows: 60% of sale are for cash. The remainder of sales will be collected 1 month later. To beginning business, Noodle V buy £108,000 and pay 100% in January. Further inventory is purchased at 50% of sales each month. Suppliers are paid 1 month later. The closing inventory should be £135,000. Wages are forecasted to be £20,000 per month, payable in the month they are incurred. Overheads excluding depreciation are forecast to be £40,000 per month and paid in the month they are incurred. Required: Jan Feb Mar Rent is £60,000 per year payable annually in advance. Equipment will be depreciated at 10% of cost per year and company will spend £150,000 on equipment. a) £240,000 £260,000 £300,000 b) c) Forecast Monthly Cash Flow Statement for the first quarter 2021. Forecast Income Statement for the period ending 31th March 2021. Forecast Statement of Financial Position as at the 31th March 2021. [1
Transcribed Image Text:SECTION B: ANSWER ALL PARTS OF THE QUESTION QUESTION B1 Noodle V Ltd start business at the 1st of Jan 2021 with share capital of £110,000. They also take a long-term loan of £160,000 and commitment to pay equally £6,900 each month (include interest). The loan interest for the first quarter is £6,000. Sale are expected to be as follows: 60% of sale are for cash. The remainder of sales will be collected 1 month later. To beginning business, Noodle V buy £108,000 and pay 100% in January. Further inventory is purchased at 50% of sales each month. Suppliers are paid 1 month later. The closing inventory should be £135,000. Wages are forecasted to be £20,000 per month, payable in the month they are incurred. Overheads excluding depreciation are forecast to be £40,000 per month and paid in the month they are incurred. Required: Jan Feb Mar Rent is £60,000 per year payable annually in advance. Equipment will be depreciated at 10% of cost per year and company will spend £150,000 on equipment. a) £240,000 £260,000 £300,000 b) c) Forecast Monthly Cash Flow Statement for the first quarter 2021. Forecast Income Statement for the period ending 31th March 2021. Forecast Statement of Financial Position as at the 31th March 2021. [1
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