ACCOUNTING COURSEWORK

Accounting Coursework



2000 word accounting coursework

Prepare a budgeted profit and loss account for the year ended 31 March 2012.

Kelly Ned Taxi Service

Profit and Loss Statement for the year ended 31 March 2012

Items

Debit

Credit

Revenue

 

 

£ 287430

Expenses

 

 

 

 

Cost of Diesel (15% of Revenue)

£ 43114.5

 

 

Maintenance costs of 3 Taxis

£ 4320

 

 

Annual road tax and license fees of 3 Taxis

£ 1800

 

 

Total depreciation on fixed assets

£ 12000

 

 

Salary Bill for Taxi Drivers

£ 216000

 

 

Salary Bill for Office staff

£ 64000

 

 

Social security Costs and Benefits

£ 28000

 

 

Utilities (water, gas and electricity)

£ 6000

 

 

Rent

£ 18000

 

 

Local property tax charges

£ 5000

 

 

Marketing Advertisement and Promotion Budget

£ 6000

 

 

 

 

£ 404234.5

Gross Profit

 

 

£ 116804.5

Income statement

The income statement, also labeled the statement of operations measures a company's performance a specified period of lime. It is frequently called “profit and loss account” For this reason the statement is titled for a period of time for example, year ending May 27, 2011 (Tshabalala, 2007).The statement is different from the balance sheet because it is a cumulative record of activity for a month, quarter, multiple quarters, or for one year. Creditors, investors, and many others use the income statement as a measuring stick of how a company has performed, where it appears to be heading, and what its future cash flows will be.

Significance of income statement

Unlike a balance sheet, which communicates information about a point in time, the income statement relates to a period of time. It summarizes certain transactions taking place over that period. In terms of published reports, the period is normally one year, although most businesses of any size produce income statements more regularly, usually quarterly and often monthly (Shipman, 2004). These monthly or quarterly accounts are normally for internal consumption only, although often banks request copies or make the production of such accounts a condition or lending money.

Application of income statement in daily life

The application of income statement is quite useful in the everyday life. The income statement of an individual's personal daily life can provide a timely and crucial financial standing of the individual (Tshabalala, 2007). The relevant information gathered from the income statement can serve as a foundation on which the individual can plan his future. For example: consider a person who is going through a financial crunch and excessive spending on luxury items, the timely relevant information from the income statement can provide with a timely in-sight and he can make corrective decision making.Prepare a trading cash budget for the first six months.

The following table provides the cash budget for the first six months for Ned Taxi Services.

CASH BUDGET

April

May

June

July

August

September

Beginning cash balance

£ 5000

£ 0

£ 0

£ 0

£ 0

£ 0

Add:

Estimated collections on accounts receivable

£ 0

£ 0

£ 6289

£ 6289

£ 6289

£ 7547

Estimated cash sales

£ 10481

£ 10481

£ 10481

£ 12578

£ 12578

£ 12578

Estimated collections by Credit Card

£ 0

£ 4193

£ 4193

£ 4193

£ 5031

£ 5031

Total Receipts

£ 15481

£ 14674

£ 20963

£ 23059

£ 23898

£ 25155

Deduct:

 

Cost of Diesel

£ 3144

£ 3144

£ 3144

£ 3773

£ 3773

£ 3773

Maintenance cost

£ 360

£ 360

£ 360

£ 360

£ 360

£ 360

Road Tax and License Fees

£ 1800

£ 0

£ 0

£ 0

£ 0

£ 0

Drivers Salaries

£ 18000

£ 18000

£ 18000

£ 18000

£ 18000

£ 18000

Office Staff Salaries

£ 5334

£ 5334

£ 5334

£ ...