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The capital that has been introduced into the business of Surya is an amount of £10,000, invested as Capital. This amount of £10,000 is taken to be the capital introduction into the business and has been added in the month of July.
The sales that are forecasted by Surya are taken into consideration for the preparation of the cash budget. The sales are to be sold at a gross margin of 35% and the credit terms for the sales is 1 month. This means that the forecasted sales for the current month will be received in the next or the coming month. Therefore, the sales made for a particular month are received and included in the next month.
The sales are said to be made at a gross margin of 35%, therefore the cost of sales could be calculated on the given information, such that they will amount to 65% of the sales made. Therefore the costs of sales for the months have been calculated by deducting Gross profits from the forecasted sales.
Additional purchases amounting to 2680 have been made for meeting the unexpected demand of goods. 20% of such purchases that is 536 have been paid in July, 30% in August that is 804, and remaining 670 in September and October.
The other expenses comprises of telephone costs of 420 per quarter that are payable in arrears. It has been assumed that the amount is paid in the next quarter, therefore expenses of telephone and electricity that is 420 and 725 for the quarter ending September 2022 are paid in December 2022. Other expenses include 250 as accountant’s fees and 90 as other expenses deducted from every month.
The monthly drawings of Surya amounting to 725 have been deducted from each month.
A loan of 15000 has been advanced by Surya’s mother that has been added in the cash balance of July. The Interest on Loan is at 8% that is due to be paid on 30th June 2023, so no adjustment is made in the present cash budget.
A van is purchased in the month of November that amounts to 9500; the loan amount has been used for the purchase of asset in November. Up until October Delivery Costs of 120 has been deducted as expenses from each month from July to October (Sun, 2022, p. 5). The cash budget has been prepared using all the information available and the closing balance of one month is taken to be the opening for the next month . The closing balance for December 2022 is 19079.5.
Cash and profits are different from each other as they are interlinked. However, the profit of an organization is calculate based on subtracting all the expenses of the organization in the financial year. As per the opinion of Sitompul and Khadijah (2020, p.3), states profit of an organization can be defined by excluding the expenses incurred in the organization in a certain period. On the other hand, an organization's cash flow defined as the amount of cash that remains inflow and outflow from the business organization. certain period. The profit of an organization is a key indicator of a business organization to retain and recognize its overall success. However, the cash flow of an organization is important to operate the business regarding their transactions in the business on a daily basis.
Credit transactions of business is a type of business transaction that does not involve immediate movement of cash in the business. This is a form of a cash transaction involves an immediate and fast interchange of amounts of cash. This involves future payment of cash from the customers or from the organization. As per the opinion of Harvey et al (2021, p.6), states transactions that are related to credit transactions do not change fast. Credit transactions of the business also require future payment or receiving of the amount of cash in the organization.
Assets of an organization defined as economic values that generate economic growth in the organization. As per the opinion of Baden-Fuller et al (2020, p.8), state assets of an organization include all the transactions and available assets that provide monetary benefits to the organization. Assets of an organization include real estate, office furniture, buildings, cash, and the goodwill of the organization. Assets of the organization provide future benefits from their valuable amount and demand in the market. This also helps to generate better cash flow for the business in the future.
This involves the business transactions and legal debts of the company. These are those legal debts owe to third-party creditors of the organization. Liabilities of the business include notes payable, bank debts, and accounts payable. As per the opinion of Shchepetov and Fedorova (2022, p. 5), states proper balance of equity and liability of an organization provides stability and helps them to grow in the market. This is very important for a business to take liabilities for their organization to promote their business and to generate a high amount of profit in a short period.
Ordinary shares of the business are also known as common shares of the business. The shares that are sole on public exchanges in the market. This provides rights to each shareholder regarding their sales and amount of stock in the business. This also provides evidence to the business owners and shareholders to make proper proportional ownership of shares in the market. As per the opinion of Agbo (2020, p. 9), states ordinary shares are issued by the organization to generate profit for their organization at high amounts in the future and to retain profit from the market.
This is defined as the number of shares of an organization where dividends are paid to shareholders before issuing common dividends of stocks. These are issues by the organization at the time of bankruptcy. Preference shares consist of convertible, participatory, non-convertible, and non-Cumulative shares. Preference shares are not important to issue in the organization. As per the opinion of Nam et al (2020,p.5), states preference shares allow the organization to provide organizational benefits as per their development and to organize work structure in the organization. However, they help to generate profit percentage from the organization and to organize profit percentage from the market.
Dividend of an organization related to earning distributions of money from the business. This amount portion returned to the investors at the time of payment of cash. This provides organizational development and allows the organization to operate in the market and earn a high amount of profit. As per the opinion of Husain and Sunardi (2020,p. 5), state creditors need to pay a high amount of money at the time of repayment of the number of transactions that have been taken in the past. The amount of cash is paid to the shareholders is referred to retain the profit percentage from the organization.
Stock exchange in accounting refers to the number of stocks that are involved in the securities market. This market is the market of securities stock exchange where market securities are purchase and sold. However, the stock exchange market traded for issuing stock market shareholders in the organization. As per the opinion of Li et al (2020, p. 4), state securities exchanges are traded in the market to meet with financial requirements of the organization. This is the securities market where they meet with financial and reporting stabilities in the organization.
This form of capital income of organization provides private equity and provides financing type in market. Venture capital of the organization is important, as they are required at the time of start-up of the business. As per the opinion of Andrusiv et al (2020, p. 6), states this is required for small businesses to start up business and to generate a high amount of profit from the market. This amount is generated from bank investments, organizational investors, and other financial institutions.
This defined as organizational values and this is referred to as a financial document of the organization. These are prepared in the organization to maintain proper cash flow and to keep updated regarding their financial needs. As per the opinion of Agbo (2020, p. 9), state budget plans are very important for an organization as they require proper estimation regarding their financial needs in the future. This also helps the organization to make savings and make proper future plans and to operate in the market in an effective way and generate profit.
Capital income of an organization is referred to the amount that has been derived during its financial year. This helps the organization to grow its business and helps them to operate in the market. As per the opinion of Karabarbounis and Neiman (2019, p. 6), states this is the amount of profit that earns after deduction and repayment of all the expenses. However, it shows the increasing amount of profit from the organization and motivates the organizational employees and their financial structure. This helps organizations to promote business and develop financial skills.
According to accounting terms, a company is defined as a voluntary association where people contribute their efforts and organizational benefits in order to generate profit percentage. This also helps the organization and its people to contribute their best and to generate profit. As per the opinion of Shchepetov and Fedorova (2022, p. 5), state companies provide development to the people by providing them with a number of products and money. This helps the organization to develop financial and organizational skills that make for the development and generate organizational profit. This helps the organization to develop financial and organizational values and retain the amount of profit from the company. This also providesfinancial stability to organization and retain values according to needs and requirements.
References
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