ACCOUNTING FOR DECISION MAKING

COURSE TITLE:

ACCOUNTING FOR
DECISION MAKING

Students:
ID:

Lecturer:

UBIS INTAKE

COURSE CODE:
ACC 601
COURSE
CODE:
MGT 601

OCTOBER 201…
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Budget plan 2017 of XIAOMI Co.,

Submitted by: …

Viet Nam
October , 201…

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Contents

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
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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
2000 units/year
volume in fiscal year)
500 unit/quarterly
- increment in 2018 -2021
25% of previous period sales
Inventory
30 # 150 million VND
Investment capital:
2,000,000,000 VND
Creditor days:
0 days (100% of the
materials purchased is
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paid at sight)
Debtor day:
Rental fee:

180 days
25,000,000 Monthly, rental fee
increased by 10% in 2018

Depreciation method: Straight-line
Sales volume pay at sight

Operating time period 1
The Price
Price growth rate
COGS
VAT
Corporate income tax
The cost of fixed assets and working
tools
Investment capital
Deposit interest payment in bank
Dividends paid in Q1 next year

The costs have full VAT
invoice
100%
5
130%
8%
5,000,000
10%
20%

Current 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

B.

Fixed assets
1

payment in Q1 next year

204,000,000 VND
2,000,000,000
0% per year
0

START UP BALANCE SHEET
Assets
A.

year
COGS
year
See Sheet COGS

Original Cost
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2

Accumulated depriciation
TOTAL ASSETS

Resources

A.

Liabilities

I.

Current Liabilities
Suppliers
Borrowing
Income tax

II.

Bank payable (long- term)

B.

Equity

I.

Owners' equity
Chartered capital
Retained earnings

II.

Other funds
TOTAL RESOURCES

FUNDING
CAPITAL
Unit: VND
Capital and
Liabilities

Beginning

- Owner's equity

2,000,000,000

- Long-term loan
Total

Q1 - 2017

Q2 - 2017

0

Q3 - 2017

Q4 - 2017

-

2,000,000,000

-

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-

-

-


COST OF GOODS SOLD
Fridge
1. COGS per 1 Fridge (without
VAT)
Ingredients
The Fridge

Unit
unit

Unit:
VND
Cost
5,000,000

Total

5,000,000

COGS per product

5,000,000

EMPLOYMENT COST
Position

Quantity

Manager
Accountant and purchasing
Sale and cashier
Security and dilivery
Cleaner
Total

SELLING AND
ADMINISTRATIO
N EXPENSES

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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

Item

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Q1 - 2018

Total year 2017

Sales volume

500

500

500

500

Price pay at sight

6,500,000

6,500,000

6,500,000

6,500,000

3,250,000,000

3,250,000,000

3,250,000,00
0

3,250,000,000

13,000,000,000

3,250,000,000

3,250,000,000

3,250,000,00
0

3,250,000,000

13,000,000,000

Total sales (VND)
Cash flow from sales

2,000

Schedule 2: COGS for year
2017
Quarter 1

Quarter 2

Quarter 3

Quarter 4

5,000,000

5,000,000

5,000,000

5,000,000

530

500

500

500

2,650,000,000

2,500,000,000

2,500,000,000

2,500,000,000

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Q1 - 2018

Total year
2017

2,030
10,150,000,000

2,650,000,000

2,500,000,000

Items

Quarter 1

Labour cost (6
employees)
Total labour cost

Cash disbursements
for labor

Depreciation
Total
depreciation

Quarter
2

10,150,000,000

Quarter
3

Quarter 4

To
tal
year
2017

Q1 2018

195,000,000 195,000,000 195,000,000 195,000,000

780,
000,
000

195,000,000 195,000,000 195,000,000 195,000,000

780,
000,
000

195,000,000 195,000,000 195,000,000 195,000,000

780,
000,
000

Depreciaiton expenses for
year 2017
Quarter
Quarter 1

2

Quarter
4

Quarter 3

Q1 2018

Total
year 2017

10,200,000

10,200,00
0

10,200,000

10,200,00
0

40,800,00
0

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

Rental and other cost
Quarterly promotion and
advertising expense
Depreciation expense

2,500,000,000

Cost of labour for year
2017

Schedule 3:

Schedule 4:

2,500,000,000

Quarter 2

Quarter 3

Quarter
4

Q1 2018

Total year
2017

84,000,000

84,000,000

84,000,000

84,000,000

336,000,000

170,000,000

170,000,000

170,000,000

170,000,000

680,000,000

10,200,000

10,200,000

10,200,000

10,200,000

40,800,000

Total labour cost
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Cash disbursements for
selling & administrative
expenses

Schedule 6:
COGS
Selling and
administration
expenses
Total cash
payments

Schedule 7:

195,000,000

195,000,000

195,000,000

195,000,000

449,000,000

449,000,000

449,000,000

449,000,000

1,796,000,000

Q1
- 2018

Quarter 1

Quarter 2

Quarter 3

Quarter 4

2,650,000,000

2,500,000,000

2,500,000,000

2,500,000,000

10,150,000,000

449,000,000

449,000,000

449,000,000

449,000,000

1,796,000,000

3,099,000,000

2,949,000,000

2,949,000,000

Total year 2017

2,949,000,000

11,946,000,000

VAT for year
2017
Quarter 2

Quarter 3

Quarter 4

Item
VAT Revenue

325,000,000

VAT COGS
VAT Selling
and
administration
expenses

325,000,000

325,000,000

250,000,000

250,000,000

250,000,000

45,920,000

45,920,000

45,920,000

45,920,000

14,080,000

Funding schedule

325,000,000

265,000,000

29,080,000

29,080,000

Schedule 8:

Schedule 9:

780,000,000

Cash payments for year 2017

Quarter 1

Net cashflow

VAT

-

Company do not borrow

Cash flows for year 2017
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29,080,000

Q
1201
8

Total year
2017

0

1,300,000,00
0

0

1,015,000,00
0

183,680,000
101,320,000

Quarter 1

Quarter 2

Q
1201
8

Total year
2017

Quarter 3

Quarter 4

1,621,000,000

1,786,080,00
0 2,116,160,000

2,446,240,00
0

1,621,000,00
0

3,250,000,000

3,250,000,00
0 3,250,000,000

3,250,000,00
0

13,000,000,0
00

Operations:
Beginning
cash balance:
Add: cash
collections
from sales
Net
cashflow VAT
Total cash
available
Less : Cash
payments
Total cash
from
operations

14,080,000

29,080,000

29,080,000

101,320,000

4,885,080,000

5,065,160,00
0 5,395,240,000

5,725,320,00
0

14,722,320,0
00

3,099,000,000

2,949,000,00
0 2,949,000,000

2,949,000,00
0

11,946,000,0
00

2,116,160,000 2,446,240,000

2,776,320,00
0

2,776,320,00
0

0

1,786,080,000

29,080,000

0

Investments:
Land &
offices

0

0

0

0

Total cash
from
investments

0

0

0

0

Dividends
paid in cash

0

0

0

0

0

Repayment
long termdebt

0

0

0

0

0

0

0

0

0

0

Financing:

Borrowing
at the
beginnings of

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quarters
Repayment
at the ends of
quarters

0

0

0

0

0

Interest

0

0

0

0

0

Total cash
from
financing:

0

0

0

0

0

2,116,160,000 2,446,240,000

2,776,320,00
0

2,776,320,00
0

Ending cash
balance

1,786,080,000

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
31/12/2017
7
13,000,000,0
Sales revenue
00
Cost of goods
10,150,000,0
sold
00
Gross
2,850,000,0

margin
00
Selling and
administratio
1,836,800,0
n expenses
00
Operati
1,013,200,0
ng Income
00
Interest
expense
Income
before tax
Income tax
Net
Income

1,013,200,0
00
202,640,0
00
810,560,0
00

Q1
3,250,000,00
0
2,650,000,00

0
600,000,00
0

Q2
3,250,000,00
0
2,500,000,00
0
750,000,00
0

Q3
3,250,000,00
0
2,500,000,00
0
750,000,00
0

Q4
3,250,000,
000
2,500,000,
000
750,000,
000

459,200,00
0

140,800,00
0

459,200,00
0
290,800,00
0

459,200,00
0
290,800,00
0

459,200,
000
290,800,
000

140,800,00
0
28,160,00
0
112,640,00
0

290,800,00
0
58,160,00
0
232,640,00

0

290,800,00
0
58,160,00
0
232,640,00
0

290,800,
000
58,160,
000
232,640,
000

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XIAOMI VN Co.,

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Balance sheet at 31 December 2017
1/1/2017

31/12/2017

Assets:

Cash
Accounts receivable

1,621,000,000
-

Inventory
Goods

150,000,000

Other short-term assets

25,000,000

Total current Assets
Plant, machinery, and equipments
Original price

Total Assets

73,680,000
-

1,796,000,000

2,850,000,0
00

204,000,000

163,200,000

204,000,000

204,000,000

Depreciation
Total fixed asstes

-

40,800,000

204,000,000

163,200,000

2,000,000,000

3,013,200,0
00

Liabilities and Shareholder's equity
Liabilities:
Accounts payable
Suppliers
Borrowing

0

-

Corporate income Tax

-

Shareholder's Equity:
Capital
Retained earnings

2,776,320,0
00

202,640,000
-

2,000,000,000
-

Add: Net income
Less: Dividends paid

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2,000,000,0
00
810,560,000


Total Liabilities and Shareholder's

equity

2,000,000,000

Check

-

Cash flows for year 2017
Operations:
Beginning cash balance:
Add: cash collections from sales
Net cashflow VAT
Total cash available
Less : Cash payments
Total cash from operations
Investments:
Land & offices
Total cash from investments
Financing:
Dividends paid in cash
Repayment long term- debt
Borrowing at the beginnings of
quarters
Repayment at the ends of quarters
Interest
Total cash from financing:
Ending cash balance

1,621,000,000

13,000,000,00
0
101,320,000
14,722,320,000
11,946,000,000
2,776,320,000
0
0
0
0
0
0
0
0
0
0
2,776,320,000

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3,013,200,0
00
-


CONCLUSION
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.

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