Income statement - cost accunting, Cost Accounting

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.

Posted Date: 2/11/2013 4:56:42 AM | Location : United States







Related Discussions:- Income statement - cost accunting, Assignment Help, Ask Question on Income statement - cost accunting, Get Answer, Expert's Help, Income statement - cost accunting Discussions

Write discussion on Income statement - cost accunting
Your posts are moderated
Related Questions
Balance Sheet Classi?cations and Relationships: Shelley and Co. has the following balance sheet elements as of December 31, 2012. Land. . . . . . . . . . . . . . . . . . . . . .

Break-Even Analysis Break-even point is the volume of sales at that there is no loss or. Break-even charts graphically show the relationship of cost to profits and volume and


Cost Volume Profit Analysis 1. Post Publishers has collected the following data for recent months: Month                 Issues published              Total cost May

Types of Standard Costs The standard cost set could be ideal, basic, attainable or current. i. Basic Standards: These are long term standards that would keep unchanged ov

OBJECTIVES OF COST ACCOUNTING : 1-DETERMINING SELLING PRICE 2-CONTROLING COST 3- PROVIDING INFORMATION FOR DESING MAKING 4-ASCERTAINING COSTING PROFIT 5-Facilitating preparation of

Compare the American Institute of CPAs' (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (I

The income statement of Holly Enterprises shows operating revenues of $134,800, selling expenses of $38,310, general and administrative expenses of $36,990, interest expense of $58

Comparison between Absorption and Marginal Costing Marginal Costing like a cost accounting system is considerably different from absorption costing. It is an optionally metho

Under what conditions is a market-based transfer price optimal?