Income statement - cost accunting, Cost Accounting

Assignment Help:

Income Statement - Cost Accunting:

A starting entrepreneur has come up with a plan to start a Gaming Outlet in Haarlem. He would like to buy a building which will cost € 700.000. He will take out a mortgage in the amount of €630.000. The mortgage is to be paid off in 20 years, interest on the mortgage is 6%. Repayment of the loan and payments on interest are to be paid in the first month of the year, starting in January 2012. Depreciation of building is 2% per year. Office equipment is to be bought for €160.000. The office equipment is to be delivered in December 2010 and to be paid in January 2011. Depreciation on office equipment is to be done in 8 years, residual value is zero. The entrepreneur will use a delivery van (worth €30.000) for his business and will bring €140.000from his private account into his business. The delivery van will depreciate to zero in 5 years.

The bank will extend a credit line with a maximum of €80.000. The credit line can be used to balance the balance sheet. Should the company have a surplus then this will mean that the company will have a positive bank balance. The interest to be paid over this account is to be paid per half year. Over the first half of the year the interest is €200 (to be paid in July 2011) and over the second halfof the year the interest is €300 (to be paid in January 2012). Per January1 2011 the company will have €1.000 in its cash register, this is equal to the amount which the company will have in its cash register at the end of every quarter.

The predicted turnover for 2011 and 2012 is €1.200.000. In both years the turnover is equally divided over the months. The entrepreneur expects that 20% of his turnover will be made by serving businesses. These business clients get a buyer's credit of one month. Regular costumers (non-business clients) pay cash. The profit margin is 40% of the turnover.

Exploitation costs are €20.000 per month and are to be paid in the same month. For purchases the company is extended a supplier's credit of one month. Before the opening of the Outlet, games are bought and stored. Total costs of the purchase of these games are €60.000. Starting in January, and then every following month, games are bought in the order of the expected purchase of goods in the following month.


Related Discussions:- Income statement - cost accunting

Process costing, If question (CA IPCC) is silent which method to follow: av...

If question (CA IPCC) is silent which method to follow: avg cost or fifo or lifo?

Calculate the opportunity costs, Suppose the Danny can prepare 50 pizzas or...

Suppose the Danny can prepare 50 pizzas or 100 sandwiches in an hour and Steve can produce 15 pizzas or 9 sandwiches. a) Draw each individual's PPF. b) Calculate the oppor

MARGINAL AND ABSORPTION COSTING, MARGINAL COSTING IS PREFERRED TO ABSORPTIO...

MARGINAL COSTING IS PREFERRED TO ABSORPTION COSTING IN DECISION MAKING WHY

Exploration costs, are eploration costs of a mining industry regarded as an...

are eploration costs of a mining industry regarded as an asset or expense or both?

Determine equivalent units of the product, Determine Equivalent Units of th...

Determine Equivalent Units of the Product Let assume there are 4,000 units of a product in ending inventory out of that 60 percent are fully complete whereas the remaining are

Calculate the payback period and accounting rate of return, Freshly Ground ...

Freshly Ground Investments have just made an investment of $550 000 in a new Toyota Hilux (with trailer) delivery vehicle. This vehicle will be used for deliveries and generate rev

Debt-equity ratio, Allie forms Broadbill Corporation by transferring land (...

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporat

Labor transactions, Labor Transactions (i) Wages Paid in cash (ii) ...

Labor Transactions (i) Wages Paid in cash (ii) Wages incurred like a) Direct labor or else b) Indirect labor  In the Financial Books  In

Classification, what is the classification of cost & how it is done?

what is the classification of cost & how it is done?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd