Maire Dixon has recently decided to set up her own business & she will invest her savings into the newly formed company: Cost and Management Accounting Assignment, UCC, Ireland

Maire Dixon has recently decided to set up her own business & she will invest her savings into the newly formed company. The business will be called Dixons Ltd.

Maire has worked in the motor industry for many years and has identified an opening in the market for an electronic diagnostics kit. The diagnostics kit can be sourced in South Korea and imported without tariffs or import duties. Units will sell at €30 each and will earn a Gross Margin of 35%.  Each unit imported will be tested by Dixons Ltd using specialist equipment. This specialist equipment will be purchased on day one of the new company’s incorporation.

Maire’s husband Thomas will be a director of the company and will give the company an interest-free loan. These funds will be available on the same date as the investment from Maire. It is anticipated that a loan will be available from the bank (see below).

Maire has asked for your help in preparing the financial projections for the company’s business plan for the first year of operation. The business plan should have a cash budget, a budgeted Income Statement, and a projected Balance Sheet for the first year of operation. All of these budgets/projections should be done on a quarterly rather than a monthly basis and a final or total (the annual budget) should also be presented.

Dixons Ltd will be granted overdraft facilities at the bank if required. It has been agreed with the bank that interest will not be charged on any overdraft for the first 6 months of operating.

Details of the expected outcomes for Dixons Ltd. are as follows

Sales projections