ACCOUNTING FOR DECISION MAKING

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COURSE CODE:

ACC 601

COURSE TITLE:

ACCOUNTING FOR DECISION MAKING

Students:

ID:

Lecturer:

UBIS INTAKE

OCTOBER 201…

COURSE CODE:

MGT 601

Budget plan 2017 of XIAOMI Co.,

Submitted by: …

Viet Nam October , 201…

Introduce of the company

As a large company, headquartered in China, XIAOMI is planning reached out across the world In particular, Viet Nam is the perfect choice for this strategy Vietnam has political

regimes and cultural similarities, have large numbers of employees in the industrial park In

addition, the geographical location is also convenient for the choice to open branches in

Vietnam

The company in Vietnam with its own legal, called Xiaomi Vina, business specializing in

cheap fridge The project established Xiaomi VN will have time 65 months, include:

preparation of legal procedures, preparation of systems, personnel, resources the time taken

is 5 months and operating activities within 5 years

The target market segment of Xiaomi VN has been competitive intense by the formidable

opponents as Dien May Cho Lon, Dien May Xanh, Nguyen Kim electronics The opponents

are very strong, have perennial business, brand, and are present at most key locations

nationwide

Vision:

Xioami VN are direct competitors in terms of refrigerators with Nguyen Kim in 2019

Mission:

Product supply fridge with affordable prices for society

Target products: fride with priced at about 6 -8 million VND

Payment method: at sight

Market segmentation:

HCMC, especially is industrial parks

Budget plan 2017 of Xioami

ASSUMPTIONS

Scope of business: selling

Fridge

Incremented sales per quarter : Based on a research 2016 at target customer in HCMC, with sample is

1.200 people Total sale 2017 (spread evenly sales

volume in fiscal year)

2000 units/year

500 unit/quarterly

materials purchased is

paid at sight)

increased by 10% in 2018 Depreciation method: Straight-line The costs have full VAT

invoice

The cost of fixed assets and working

START UP BALANCE SHEET

Assets

1 Cash and cash equivalents

Cash at bank Cash equivalent

2 Short-term receivables

3 Inventories

Direct materials Finished goods

4 Other short-term assets

Start up expenses prepaid

1 Original Cost

2 Accumulated depriciation

TOTAL ASSETS Resources

Suppliers Borrowing Income tax

Chartered capital Retained earnings

TOTAL RESOURCES

FUNDING

CAPITAL

Unit: VND Capital and

Liabilities Beginning Q1 - 2017 Q2 - 2017 Q3 - 2017 Q4 - 2017

- Owner's equity 2,000,000,000

- Long-term loan

0

-

Total 2,000,000,000 -

- - -

COST OF GOODS SOLD

Fridge

1 COGS per 1 Fridge (without

VAT)

Unit: VND

5,000,000

Total

5,000,000 COGS per product

5,000,000

EMPLOYMENT COST

Manager

Accountant and purchasing

Sale and cashier

Security and dilivery

Cleaner

Total

SELLING AND

ADMINISTRATIO

N EXPENSES

Rental and other cost

Item

Rental cost

Start-up Expenses

Electric, water … cost

Note: Rental expenses shall be increased by 10% in 2018 (Assumption 8)

Quarterly promotion and advertising expense

Expenses

Web design

Web maintenance

Promotion expenses

Total

These planning board

Schedule 1: Sales for year ended 31 December 2017

Sales volume 500 500 500 500 2,000 Price pay at sight

6,500,000

6,500,000

6,500,000

6,500,000

Total sales (VND) 3,250,000,000 3,250,000,000 3,250,000,00

0

3,250,000,000

13,000,000,000

Cash flow from sales 3,250,000,000 3,250,000,000 3,250,000,00

0

3,250,000,000 13,000,000,000

Schedule 2: COGS for year

2017

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Q1 - 2018 Total year

2017

5,000,000

5,000,000

5,000,000

5,000,000

530

500

500

500

2,030

2,650,000,000

2,500,000,000

2,500,000,000

2,500,000,000

10,150,000,000

2,650,000,000 2,500,000,000 2,500,000,000 2,500,000,000 10,150,000,000

Schedule 3: Cost of labour for year

2017

2

Quarter

3 Quarter 4

Q1 - 2018

To tal year 2017

Labour cost (6

employees)

195,000,000

195,000,000

195,000,000

195,000,000

780, 000,

000

Total labour cost

195,000,000

195,000,000

195,000,000

195,000,000

780, 000,

000

Cash disbursements

for labor 195,000,000 195,000,000 195,000,000 195,000,000

780, 000,

000

Schedule 4: Depreciaiton expenses for

year 2017

Quarter 1 Quarter

2 Quarter 3

Quarter

4

Q1 - 2018

Total year 2017

Depreciation 10,200,000

10,200,00

0

10,200,000

10,200,00

0

40,800,00

0

Total

depreciation

10,200,000

10,200,00

0

10,200,000

10,200,00

0

40,800,00

0

Schedule 5: Selling and administrative expenses for year 2017

Quarter 1 Quarter 2 Quarter 3 Quarter 4 2018 Q1 - Total year 2017

Rental and other cost 84,000,000 84,000,000 84,000,000 84,000,000 336,000,000 Quarterly promotion and

advertising expense 170,000,000 170,000,000 170,000,000 170,000,000 680,000,000 Depreciation expense 10,200,000 10,200,000 10,200,000 10,200,000 40,800,000 Total labour cost

195,000,000 195,000,000 195,000,000 195,000,000 - 780,000,000

Cash disbursements for

selling & administrative

expenses

449,000,000 449,000,000 449,000,000 449,000,000 1,796,000,000

Schedule 6: Cash payments for year 2017

Quarter 1 Quarter 2 Quarter 3 Quarter 4 - 2018 Q1 Total year 2017

COGS 2,650,000,000 2,500,000,000 2,500,000,000 2,500,000,000 10,150,000,000 Selling and

administration

expenses 449,000,000 449,000,000 449,000,000 449,000,000 1,796,000,000

Total cash

payments 3,099,000,000 2,949,000,000 2,949,000,000 2,949,000,000 11,946,000,000

Schedule 7: VAT for year

2017

Item

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Q

1 - 201 8

Total year 2017

VAT Revenue 325,000,000 325,000,000 325,000,000 325,000,000 0

1,300,000,00

0

1,015,000,00

0 VAT Selling

and

administration

Net cashflow

VAT

14,080,000

29,080,000

29,080,000

29,080,000

101,320,000

Schedule 8:

Funding schedule Company do not borrow

Schedule 9: Cash flows for year 2017

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Q

1 - 201 8

Total year 2017

Operations:

Beginning

cash balance: 1,621,000,000

1,786,080,00

0 2,116,160,000

2,446,240,00

0

1,621,000,00

0

Add: cash

collections

from sales 3,250,000,000

3,250,000,00

0 3,250,000,000

3,250,000,00

13,000,000,0

00

Net

cashflow VAT 14,080,000 29,080,000 29,080,000 29,080,000 101,320,000

Total cash

available 4,885,080,000

5,065,160,00

0 5,395,240,000

5,725,320,00

0

14,722,320,0

00

Less : Cash

payments 3,099,000,000

2,949,000,00

0 2,949,000,000

2,949,000,00

0

11,946,000,0

00

Total cash

from

operations 1,786,080,000 2,116,160,000 2,446,240,000

2,776,320,00

0

2,776,320,00

0

Investments:

Land &

Total cash

from

Financing:

Dividends

Repayment

long term-

Borrowing

at the

beginnings of

Repayment

at the ends of

Total cash

from

Ending cash

balance 1,786,080,000 2,116,160,000 2,446,240,000

2,776,320,00

0

2,776,320,00

0

After we have these information above, we will built balance sheet, P&L and Cashflow of end

year 2017

XIAOMI VN Co.,

Income statement for year 2017

1/1/201

Sales revenue 13,000,000,000 3,250,000,000 3,250,000,000 3,250,000,000 3,250,000,000 Cost of goods

sold

10,150,000,0

00

2,650,000,00

0

2,500,000,00

0

2,500,000,00

0

2,500,000,

000

Gross

margin

2,850,000,0

00

600,000,00

0

750,000,00

0

750,000,00

0

750,000,

000

Selling and

administratio

n expenses

1,836,800,0

00

459,200,00

0

459,200,00

0

459,200,00

0

459,200,

000

Operati

ng Income

1,013,200,0

00

140,800,00

0

290,800,00

0

290,800,00

0

290,800,

000

Interest

expense -

Income

before tax

1,013,200,0

00

140,800,00

0

290,800,00

0

290,800,00

0

290,800,

000

Income tax

202,640,0

00

28,160,00

0

58,160,00

0

58,160,00

0

58,160,

000

Net

Income

810,560,0

00

112,640,00

0

232,640,00

0

232,640,00

0 232,640,

000

XIAOMI VN Co.,

Balance sheet at 31 December 2017

1/1/2017 31/12/2017

Assets:

Cash

1,621,000,000

2,776,320,0

00 Accounts receivable -

Inventory

150,000,000

73,680,000

Other short-term assets

25,000,000

Total current Assets

1,796,000,000

2,850,000,0

00

Plant, machinery, and equipments

204,000,000

163,200,000 Original price

204,000,000

204,000,000 Depreciation -

40,800,000

Total fixed asstes

204,000,000

163,200,000

Total Assets 2,000,000,000

3,013,200,0

00

Liabilities and Shareholder's equity

Accounts payable

Suppliers -

Borrowing -

Corporate income Tax - 202,640,000

Shareholder's Equity:

-

2,000,000,0

00 Retained earnings -

Add: Net income -

810,560,000 Less: Dividends paid -

Total Liabilities and Shareholder's

equity

2,000,000,000

3,013,200,0

00

-

Cash flows for year 2017

Operations:

Beginning cash balance: 1,621,000,000

Add: cash collections from sales

13,000,000,00

0

Total cash available 14,722,320,000

Less : Cash payments 11,946,000,000

Total cash from operations 2,776,320,000

Investments: 0

Total cash from investments 0

Financing: 0

Borrowing at the beginnings of

Total cash from financing: 0

Ending cash balance 2,776,320,000

With budget planning as above, XIOAMI Co., will know the total expenses incurred, total revenue, gross profit for each month, quarter and year 2017 This is also the basis for the process of executive leadership team that will base themselves on decisions taken, adjust, control, push to accomplishing the plan outlined,

In summary, the budget plan is a management tool professional, efficient, modern, a lot companies and countries around the world use