Finance for Leisure and Tourism, Math Problem Example

Balance Sheet

For the Year Ended

December 31, 2010

================

Schedule of Operating Expenses

For the Year Ended

December 31, 2010

Significant Accounting Policies and General Information

Nature of Business

The company is a small private company, which organizes children events. Stock valued at cost amounted 120,000. Depreciation on motor vehicles at 20% on cost and on fixed fittings at 25% reducing balance method.

Provision of legal fees ……………………2000

Rent paid in advance ……………………..3000

Corporation tax based on profits of….2000

Ordinary Dividend Proposed 10p per share

Inventory

Valued at lower cost or market and cost determine don first-in, first-out cash basis.

Property, Plant and Equipment

Property, plant, and equipment stated at cost less accumulated amortization. Amortization rates used are as follows:

Furniture and Equipment ………7.5% declining balance

Motor Vehicles ………………………117% declining balance

Fixtures and Fittings

At cost……………………………..400

Net Book Value…………………370

Motor Vehicles

At cost……………………………..150

Net Book Value…………………-25

Notes to the Financial Statements

Due to Share Holder

The amount due to the shareholder bears interest rate at a rate determined annually and has not fixed terms of repayment.

Interest paid for 2010 was 10p per share

Long Term Debt

Bank term loan bearing interest…….50

Stock at 31^st December 2010 valued at cost amounted to……120,000

Depreciation provided on motor vehicles at 20%

on cost and on fixtures and fittings at 25% reducing balance method

Provision for legal fees at…………………………..2000

Advance Rents paid 31^st December 2010…….3000

Corporation Tax based year 2010………………..2000

Ordinary Dividend of 10p per share proposed

Stated Capital…………………………………250

Cash Flow Statement

Capital Investment in Cash……………….60000

Bank Loan 100,000 (4%)

End of year loan capital repayment…….10,000

Five-year lease on premises……………….11,000

Other Fixed Assets 30,000 (depreciation five-ear useful life with straight-line method of depreciation)

Staff wages 100,000 per month.

Various operating costs 8,000 per month paid one month in arrears

Fee Income from clients 360,000

Not paid a salary instead withdrawal of 30,000 as dividends half year in equal amounts

Cash Flow from Operations – January

Net income

Additions (sources of cash)

Capital Investment in Cash……………….60000

Fee Income from Clients…………………..360000

Bank Loan………………………………………100000

Dividends Per month………………………..10000

                                                                               530000

Subtracts (Uses of Cash)

Staff Wages……………………………………100000

Lease on Premises………………………….11000

Various operating expenses……………..8000

Changes in Cash……………………………..118000

Cash Balance………………………………….402000

Cash Flow from Operations – February

Cash Balance from January………………402000

Additions

Cash Dividends………………………………..10000

                                                                                412000

Subtracts

Staff Wages……………………………………………………..100000

Various Operating Expenses………………………………8000

Changes in Cash……………………………………………….118000

Cash Balance……………………………………………………304000

Cash Flow from Operations – March

Cash Balance from February……………………………..304000

Additions

Cash Dividends………………………………………………..10000

                                                                                                        404000

Subtracts

Staff Wages……………………………………………………..100000

Various Operating Expenses………………………………8000

Changes in Cash……………………………………………….118000

Cash Balance……………………………………………………286000

Cash Flow from Operations – April

Cash Balance from March………………………………….296000

Additions

Cash Dividends…………………………………………………10000

Subtracts

Staff Wages………………………………………………………10000

Various Operating Expenses……………………………….8000

Changes in Cash………………………………………………..118000

Cash Balance…………………………………………………….278000

Cash Flow from Operations – May

Cash Balance from April…………………………………….278000

Additions

Cash Dividends………………………………………………….10000

                                                                                                          378000

Subtracts

Staff Wages………………………………………………………10000

Various Operating Expenses……………………………….8000

Changes in Cash………………………………………………..118000

Cash Balance…………………………………………………….268000

Cash Flow from Operations – May

Cash Balance from April……………………………………..268000

Additions

Cash Dividends…………………………………………………..100000

                                                                                                            278000

Subtracts

Staff Wages………………………………………………………100000

Various Operating Expenses……………………………….8000

Changes in Cash………………………………………………..118000

Cash Balance…………………………………………………….200000

Cash Flow from Operations June

Cash Balance from May………………………………………200000

Additions

Cash Dividends………………………………………………….10000

                                                                                                          210000

Subtracts

Staff Wages………………………………………………………100000

Various Operating Expenses……………………………….8000

Changes in Cash………………………………………………..118000

Cash Balance…………………………………………………….192000

Cash Flow from Operations – August

Cash Balance from July……………………………………….192000

Additions

Cash Dividends…………………………………………………..10000

                                                                                                       20200

Subtracts

Staff Wages…………………………………………………………100000

Various Operating Expenses…………………………………..8000

Changes in Cash……………………………………………………118000

Cash Balance

Cash Flow from Operations – September

Cash Balance from August………………………………………84000

Additions

Cash Dividends……………………………………………………..10000

                                                                                                             94000

Subtracts

Staff Wages…………………………………………………………..100000

Various Operating Expenses…………………………………….8000

Changes in Cash……………………………………………………..118000

Cash Balance…………………………………………………………..76000

Cash Flow from Operations – October

Cash Balance from September……………………………………76000

Additions

Cash Dividends………………………………………………………..10000

                                                                                                              86000

Staff Wages……………………………………………………………..100000

Various Operating Expenses………………………………………8000

Changes in Cash……………………………………………………….118000

Cash Balance……………………………………………………………-32000

Cash Flow from Operations – November

Cash Balance from October………………………………………..-32000

Additions

Cash Dividends…………………………………………………………10000

                                                                                                                     -22000

Subtracts

Staff Wages………………………………………………………………10000

Various Operating Expenses………………………………………..8000

Changes in Cash…………………………………………………………118000

Cash Balance……………………………………………………………. -140000

Cash Flow from Operations – December

Cash Balance from November……………………………………..-140000

Additions

Cash Dividends…………………………………………………………..10000

                                                                                                                    -130000

Subtracts

Staff Wages……………………………………………………………….100000

Various Operating Expenses………………………………………… 8000

Changes in Cash………………………………………………………… 118000

Cash Balance…………………………………………………………….. -248000