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So, for one of my business classes, we have to write a sample business plan as our end of the semester project. So, our group split up the responsibilities- and today we're compiling everything (it's due tonight). The person preparing the financial plan, didn't finish their part! There are blanks and wrong numbers all over the place, and it's basically up to me to fix it at this point (everyone else has exams this afternoon). Since I haven't taken accounting.... help! I'm figuring most of it out, but I have questions. Here are a few to start, more to follow I'm sure!
*How do we calculate the accounts payable (for the year)? What is it based on?
*On the Profit and Loss sheet- the interest expense and taxes incurred- I think some of them are there, but what are all the parts they should be coming from? Loans? What else?
*Balance sheet: current borrowing is what we pay back for the whole year, right? And long term liability would include the total amount of the loan after the amount we paid for the year?
Thanks so much in advance!
-------------------- My software never has bugs. It just develops random features. Dr. Wilson: Beauty often seduces us on the road to truth. Dr. Gregory House: And triteness kicks us in the nads. -House MD Posts: 114 | From: Glastonbury, CT / Houghton, NY | Registered: Jun 2006
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Yes- our business is a healthy fast food restaurant. So, amount we own vendors would just be how much is costs us to buy our inventory?
-------------------- My software never has bugs. It just develops random features. Dr. Wilson: Beauty often seduces us on the road to truth. Dr. Gregory House: And triteness kicks us in the nads. -House MD Posts: 114 | From: Glastonbury, CT / Houghton, NY | Registered: Jun 2006
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vendors would normally include more then just your inventory providers. Any services contracted for example, such as cleaning, gardening, accounting :-), payroll, uniforms to name a few I've dealt with when in the restaurant industry. Don't know if your example is this complicated, but just wanted to say vendor != inventory.
Posts: 287 | From: Sacramento, CA | Registered: Sep 2005
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Accounts Payable is ANY money you pay out, includes what ILS mentioned, as well as advertising, utilities, rent, etc. -- unless they are listed as separate line items. Accounts Receivable is any money you get in through billing, so there shouldn't be any of that for your type of business, it should be all cash.
If you're a franchise, don't forget about franchise fees as well!
I think interest expense is just through any loans (mortgage, equipment). Taxes you should be able to project, since most businesses of your type pay estimated taxes on a quarterly basis and it's calculated/projected based on your previous year's return.
And don't forget ALL the taxes -- on the business profits as well as property (if you're not renting but purchasing the building), withholding, etc. for your employees, as well as any sales tax you have to charge.
Does one of your textbooks have sample forms for you to use? If so, you should be able to get definitions off of that, too. You can also check various small business sites -- they often have the appropriate forms/publications that explain and detail all the information for you.
-------------------- Like every good third-in-a-series it contains a whole load of ewoks, ‘Clubber’ Lang, whey-faced Sophia Coppola, Sean Connery as the Pirate Captain’s estranged dad, a crappy CGI alien, and Richard Pryor on a donkey. -- Gideon Defoe Posts: 2211 | From: Harford County, MD | Registered: Oct 2005
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Interest expense comes from the loans or notes that you owe to other parties.
Taxes incurred are the taxes you owe to the government.
Current borrowing is any loan(s) that you have taken out that are due within one year. Long term is anything due in longer than one year.
-------------------- Heisenberg may have slept here.
I got an idea... an idea so smart my head would explode if I even began to know what I was talking about. Posts: 291 | From: Greenville, SC | Registered: Apr 2005
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quote:Originally posted by Jocko's Jolly: Accounts Payable is ANY money you pay out, includes what ILS mentioned, as well as advertising, utilities, rent, etc. -- unless they are listed as separate line items.
Slight nitpick. AP is not necessarily any money you pay out. It is an expense you will pay for in the future. Think of any kind of bill you get at home. You owe it, but you don't pay it right away.
-------------------- Heisenberg may have slept here.
I got an idea... an idea so smart my head would explode if I even began to know what I was talking about. Posts: 291 | From: Greenville, SC | Registered: Apr 2005
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