Complete the following in small groups / individually as per the instructions from your facilitator:
12.1 You are a sole trader operating under the name Spice Co. You produce the chemical flavours used to flavour foodstuffs. You have been in operation since 1998. You produce Annual Financial Statements, so that interested parties, such as the bank, clients and suppliers who do business with you and SARS, the Receiver of Revenue, may review these financial statements and make decisions on the results accordingly.
Spice Co.
Statement of Income and Expenditure
For the period 1 September 2XX5 to 31 August 2XX6
R
Income
Sales
1,500,000
Less: Purchases
700,000
Gross Profit
800,000
Less: Expenditure
Accounting Fees
1,200
Cleaning Materials
5,000
Computer Expenses
20,000
Motor & Travel
50,000
Rental of Factory Premises
200,000
Stationery & Office Expenses
20,000
Staff Refreshments
10,000
Salaries
400,000
Staff Training
1,000
UIF
4,000
Workman’s Compensation
4,000
Net Profit
84,800
Draw up a simple budget for the three-month period from 1 September 2XX6 to 30 November 2XX6. You may work on the assumption that all the costs have gone up by 10% across the board due to higher inflation and increases in the prime lending rate. Your annual income has increased by 15%.
Expense item
September
October
November
Total
Accounting Fees
110
110
110
330
Computer Expenses
173.61
173.61
173.61
1770.83
Motor & Travel
166.67
166.67
166.67
5500.01
Rental of Factory Premises
4583.33
4583.33
4583.33
13749.99
Stationery & Office Expenses
18 333.33
18 333.33
18 333.33
Staff Refreshments
1833.33
1833.33
1833.33
Salaries
916.67
916.67
916.67
Staff Training
36 666.67
36 666.67
36 666.67
Total expenses
91.67
91.67
91.67
62 875.28
62 875.28
62 875.28
12.2 Explain how operational objectives of the unit are established in line with the unit’s strategic plan:
This response will be reviewed and graded after submission.
Grading can be reviewed and adjusted.
Grading can be reviewed and adjusted.
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