Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-1 Chapter 5 Budgeted financial statements

Accounting & Financial Analysis 11 Lecture 9 Budgets

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-3 Budgeted financial statements  Statement of financial performance  Statement of financial position  Cash flow statement The above budgets summarise the forecasts made in all other budgets.

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-4 Budgeted statement of financial performance is a summary of the following budgets  Sales and/or fees  Cost of goods sold  Operating expenses  marketing  administration  financial This budget is not affected by GST accounts.

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-5 Budgeted statement of financial position  This budget is prepared from asset, liability and owners equity accounts.  If GST payable is >GST input tax credits, the net GST payable is shown as a current liability.  If GST payable is <GST input tax credits, the net GST input tax credit is shown as a current asset.

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-6 Preparation of statement of financial position Examples of the information needed:  Net profit or loss  Accounts receivable balance  Accounts payable balance  Pattern of paying expenses  Rates and methods of depreciation  Any acquisition or disposal of assets  Any drawings made by the owner  Any capital contributions made by the owner

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-7 Budgeted statement of cash flows  Is a cash budget in a format that complies with either AAS28 or AASB1026.  If the GST payable is >input credits receivable in the relevant period the resultant amount is paid to the ATO.  If the GST payable is <input credits receivable in the relevant period the resultant amount will be refunded by the ATO.

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-8 The budgeted cash flow statement is divided into 3 main categories  Operating activities: provision of goods and services.  Investing activities: acquisition and disposal of non-current assets.  Financial activities: changes to the financial structure of the business.

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-9 Classification of cash inflows outflows Creditors for interest Sale of G &S Other expenses Suppliers of stock employees Operating activities Dividends received Interest received Government For taxes

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-10 Classification of cash inflows outflows Collection of loans Sale of non-current assets Giving loans Purchase of non-current assets Investing activities

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-11 Classification of cash inflows outflows Sale of shares Borrowings Financing activities Buy back shares Pay dividends Repay debt

Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Budgeting, second edition, by Banks & Giliberti Slides prepared by Mya Aronfeld 5-12 Budgeted statement of cash flows for period ended... Cash flows from operating activities: Net cash inflow (outflow) from operating activities Cash flows from investing activities: Net cash inflow (outflow) from investing activities $ Cash flows from financing activities: Net cash inflow (outflow) from financing activities Net increase (decrease) in cash held Cash at beginning of period Cash at end of period