FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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You are to following:
(c) The results for the of trading.
TUTORIAL TOPIC 2
1.
Calculate:
(b) The value of sales at break-even.
annum?
(d) What level of sales will achieve a profit of £40,000 per annun
Michael Morris decides to set up a business as a television retailer. Having
considered the matter carefully Michael comes to talk to you about this. He has
worked out most of the figures but he is uncertain about how profitable the business
will be. Michael wants to give himself plenty of time to sort things out and he is not
planning to start trading until the 1st July 2019
He has arranged to lease some purpose-built premises for five years from his aunt for
£25,000. The £25,000 will be paid the day he starts in business. The cost of this
payment will be written off over the five years of the lease on a straight line basis.
An initial stock of 50 televisions will be purchased. As the televisions are sold off thev
will be replaced by purchase of new stock.
It is estimated that sales on a cash basis Will take place at a rate of 35 per month
The sales price of each television is £300 with the purchase price being£150
depreciation of the property rental payment.
(a) The initial investment on 1 July 2019
money.
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Transcribed Image Text:You are to following: (c) The results for the of trading. TUTORIAL TOPIC 2 1. Calculate: (b) The value of sales at break-even. annum? (d) What level of sales will achieve a profit of £40,000 per annun Michael Morris decides to set up a business as a television retailer. Having considered the matter carefully Michael comes to talk to you about this. He has worked out most of the figures but he is uncertain about how profitable the business will be. Michael wants to give himself plenty of time to sort things out and he is not planning to start trading until the 1st July 2019 He has arranged to lease some purpose-built premises for five years from his aunt for £25,000. The £25,000 will be paid the day he starts in business. The cost of this payment will be written off over the five years of the lease on a straight line basis. An initial stock of 50 televisions will be purchased. As the televisions are sold off thev will be replaced by purchase of new stock. It is estimated that sales on a cash basis Will take place at a rate of 35 per month The sales price of each television is £300 with the purchase price being£150 depreciation of the property rental payment. (a) The initial investment on 1 July 2019 money.
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