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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.
Now along with the illustration of Ramsons at hand, this is not tough for us to understand that Ramsons have invested the 'money to make money'. Where has Ramsons invested the mone
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