Content

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

Accounts Payable
Bank Loan

Capital

P/L
(Feb)

Insurance

Land
Accumulated depreciation - PPE
Building

Depreciation expense

Bank Loan
Income/ Expense
1
$23,009

$1,620
$15,000
$80,000

$200,000
$18,751
$250,000

$50,878

2
$50,000

$50,000

2
($960)
$960

4
($35,000)

$10,000

$25,000

5

$500

($500)
6

$200

($200)
8
$1,500

$1,500
10
No record

12

$2,000

$2,000
13
$1,000

($1,000)

15
No record

16
($1,000)

($1,000)
17
($400)

($400)
21

$300

($300)
25
($600)

($600)

27
($8,800)

($8,800)
28

($1,200)

$1,200

28

($80)

($80)
Total
$28,749
$880
$1,620
$16,000
$90,000
($1,200)
$225,000
$19,751
$250,000
$1,200
$100,278

($7,780)

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.

Cash
Prepaid
Office Supplies
Accounts Receivable

Accounts Payable
Bank Loan

Capital
P/L
Date (Mar)

Insurance

Land
Accumulated depreciation - PPE
Building

Depreciation expense

Income/ Expense
1

1
$1,000

$11,000

$12,000
2
$1,500.00

$1,500.00
4

$200

$200
5
No

10
$1,000

($1,000)

11
($300)

($300)

12
($400)

($400)
14
($300)

($300)

16

$600

($600)
17
($500)

($500)
20
$100

$200

$300
25
$11,000

($11,000)

31