Finance for Leisure and Tourism, Math problem Example

BALANCE SHEET

FOR THE YEAR ENDED

DECEMBER 31, 2010

 

                                                                                                            Debits             Credits

Legal Fees                                                                                              8

Bank                                                                                                    122

Creditors                                                                                                                         67

Bank Loan                                                                                                                      50

Bank Interest                                                                                           4

Debtors                                                                                               320

Directors Salaries                                                                               105

Electricity                                                                                              43

Insurance                                                                                               17

Motor Vehicles at cost                                                                         150

Accumulated Depreciation                                                                                 30

Fixtures and Fittings at cost   400

Accumulated Depreciation                                                     175

Office expenses                                                                                                              55

Ordinary share capital                                                                        250

Profit and loss account                                                                                                  126

Purchases                                                                                           2180

Rents and rates                                                                                      85

Repairs                                                                                                   25

Sales                                                                                                                           3100

Stock                                                                                                   144

Wages and salaries                                                                             140__                         

                                                                                                            3493                3678

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

 

 

 

 

Schedule of Operating Expenses

For the Year Ended

December 31, 2010

Amortization                                                                                          50

Bad Debts                                                                                               67

Bank Charges and Interest                                                                     4

Insurance                                                                                                17

Legal and Accounting                                                                        8004

Management Fees                                                                                 105

Office and General                                                                                 55

Rent and Utilities                                                                               3085

Repairs and Maintenance                                                                       25

Supplies                                                                                              2180

Wages and Benefits                                                                              140

Vehicle                                                                                                 120

======

13852__

 

 

 

 

 

 

 

 

 

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 31st 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 31st 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

                                                                                                202000                                   

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                         

Subtracts

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