Content 1
1.0 Work out Capital 2
2.0 Worksheet 3
3.0 Advise report for Sally 4
4.0 Worksheet continues 5
5.0 Financial statements 6
A. An Income Statement for the period 1 February to 31 March 2015 6
B. A Statement of Changes in Equity for the period 1 to 31 March 2015 7
C. A classified Balance Sheet as at 31 March 2015 8
6.0 Suggestions for Sally 9
Reference: 10
1.0 Work out Capital
Work out Capital as at 1 February 2015
Capital at 1 February 2015
Asset = Cash +Date of Birth + Accounts Receivable + Office Supplies + Land + Building = $20,000 +$3,009+$15,000+$1,620+$80,000+$200,000 =$319629
Liability = Accounts Payable + Student ID + Bank Loan = $15,000 + $3,751 +$250,000 =$268751 Capital = Asset - Liability =$319629 - $268751=$50878
2.0 Worksheet
Worksheet is outlining the transactions of Sally’s Pet Services for February. Worksheet
Date
Cash
Prepaid
Office Supplies
Accounts Receivable
3.0 Advise report for Sally
Write a report advising Sally about her concerns about her profit figure. Should she be worried about the forthcoming bills? As part of your answer, prepare an Income Statement for the period 1 to 28 February 2015 and provide an explanation of what it shows for Sally
It is first month start her business and lots of things need a purchase. Even that she still make a profit before the interest.
In Sally ‘s income statement, it shows that Sally is making laws for her business in this month due to higher interest expense ($8800). However, people normally pay a high interest fee one time a year or two times a year, therefor sally does not need worry about the forthcoming bills.
In her income statement, Sally made $3,500 for her first month, that is services revenue ($2,000) and sales revenue ($1,500). Also Sally spent $880 for prepaid insurance, paid $400 to her employees, $200 paid to suppliers and $1200 about depreciation expense, therefor Sally make a profit ($820) in this month
Sally’s Pet Services
Income statement
For the ended 28 February 2015
Service Revenue
$2,000
Sales Revenue
$1,500
Total Income $3,500
Expenses
Insurance Expense $880 Salary Expense $400 Supplier Expense $200 Depreciation Expense
$1200
Total Expense $2,680
Profit before interest and tax $820
Interest Expense
$8800
Profit before tax ($7980)
4.0 Worksheet continues
Continue the worksheet outlining the transactions of Sally’s Pet Services for March. Ignore all tax issues.
