Werner Seebacher - Management Accounting. Workbook 2

Under additional consideration of income tax, the following profit plan structure results for the case studies:

Figure 11: Profit Plan, Structure for Numerical Examples

The presentation chosen is simplifying in so far, as items such as other income and income from participations remain unregarded. In the numerical examples, other income is added to the items mentioned in the profit plan, if required.

In the simplified structure of the finance plan, which the numerical examples are based on, the following items of the finance plan are mentioned – depending on the definition of the respective numerical example: as a starting point the profit/loss after tax, in addition depreciation, changes in provisions, receivables, liabilities and inventory, investments, changes in long-term liabilities, capital increase, dividends, as well as the final result, either surplus or demand.

Further items such as goods on own account (capitalized) and deferred income or deferred charges, are supplemented in the numerical examples – if required – in addition to the items mentione.

Figure 12: Finance Plan, Structure for Numerical Examples

The basis for the numerical examples is always the opening balance sheet, as well as a profit plan, a finance plan and a budgeted balance sheet.

The profit plans which form the basis for the examples are always based on a profit or loss of 0. A possible profit or loss does not arise before the respective business activities have been incorporated into the connection between profit plan, finance plan and budgeted balance sheet.

Based on the connection between profit plan, finance plan and budgeted balance sheet (exception: Case Study 1: Foundation of an Enterprise) the following numerical effects on profit plan, finance plan and budgeted balance sheet can be taken for granted, before considering the additional business activities in each of the numerical examples:

The depreciation included in the framework of the fixed costs in the profit plan, which has a negative effect on the profit of the enterprise, is corrected with a positive mathematical sign in the finance plan, as it does not lead to a payment in cash. With a profit or loss of zero in the profit plan, this results simultaneously in a surplus of cash in the finance plan.

The depreciation shown in the finance plan, subsequently reduces the value of the assets in the budgeted balance sheet, the surplus of cash from the finance plan increases the bank account in the budgeted balance sheet.

A possibly arising profit is taxed with a tax rate on income amounting to 30 % in the numerical examples. There are no prepayments of taxes.

The VAT for calculating receivables and liabilities amounts to 19 %. The amount of VAT which remains as the difference between the VAT that is charged to the customers and the VAT that is charged by the suppliers, is not presented for reasons of simplicity.

Every numerical example contains an empty answer sheet directly after the assignment of tasks or the basic data respectively, which can be used for entering the individual answer steps.

Please, enter the business activities described in the respective assignments of tasks, into the existing connection between profit plan, finance plan and budgeted balance sheet.

In the framework of compiling them, please consider putting in the respective business activities according to the order of their creation, either beginning with the profit plan and/or with the finance plan.

Please, take into account, that the result of the profit plan, the profit or loss, must be transferred into the finance plan as a new starting point.

After finishing the profit plan – and also the finance plan derived from it – please compile the connection between finance plan and budgeted balance sheet. Please, consider that each figure from the finance plan changes a certain item in the balance sheet from the opening balance sheet towards the budgeted balance sheet.

After having transferred all changing values from the finance plan into the budgeted balance sheet, both balance sheet sides must result in identical balance sheet totals.

All further pages following the empty answer sheet present the individual answer steps with detailed annotations to the respective answer steps, also a summary of them is shown in an overall answer.

The following numerical examples which represent typical business activities or business cases respectively, are presented in the “Workbook 2 – Profit Plan | Finance Plan | Budgeted Balance Sheet”:

- Example 1: Foundation of an Enterprise

- Example 2: Capital Increase

- Example 3: Dividend

- Example 4: Investment

- Example 5: Financing

- Example 6: Investment and Financing

- Example 7: Purchase/Use of Goods, Turnover/Sales, Bank Account

- Example 8: Purchase/Use of Goods, Turnover/Sales, Receivables, Liabilities

- Example 9: Deferred Charges

- Example 10: Deferred Charges, Subsequent Year

- Example 11: Deferred Charges, Subsequent Year, Continuation

- Example 12: Deferred Income

- Example 13: Deferred Income, Subsequent Year

- Example 14: Deferred Income, Subsequent Year, Continuation

- Example 15: Provision, Formation

- Example 16: Provision, Reversal

- Example 17: Provision, Payment

- Example 18: Asset Disposal

- Example 19: Sale and Lease Back

- Example 20: Goods on Own Account

Assignment of tasks

A new enterprise is to be founded. In the framework of the foundation the associates (shareholders) plan to make a capital contribution (cash deposit) amounting to 300,000 into the enterprise.

On the following page the so far completely empty elements, opening balance sheet, profit plan, finance plan and budgeted balance sheet of the enterprise to be founded, are presented.

Please, present in what way the foundation by capital contribution affects profit plan, finance plan and budgeted balance sheet of the enterprise.

Basic Data

Figure 13: Foundation of an Enterprise | Basic Data

Answer Form

Figure 14: Foundation of an Enterprise | Answer Form

Complete Answer Key Step 1-2/2

Figure 15: Foundation of an Enterprise | Complete Answer Key Step 1-2/2

The enterprise is founded with a capital contribution by the associates (shareholders). The associates (shareholders) invest equity capital to the amount of 300,000 into the enterprise. The investment of the equity capital is carried out through the item Capital Increase in the finance plan. (1)