AmandaWhitehas started a domestic cleaning business Spotless View Cleaning (SVC).She started the business on 1st May 2013, it is now 30th June and she has asked for your assistance in preparing her financial statements.On 1st May Amanda deposited $5,000 into a new bank account opened in the name of the business. The $5,000 consisted of a $2,400 interest free loan from her father and $2,600 of her own money.
Amanda rented some equipment from Barry’s Equipment Hire. On 1st May, she signed a four-month rental agreement on cleaning equipment (vacuum cleaners and a floor polishing machine) and paid $400 for the four month rental period. On the same day Amanda also purchased (for $3,000) an old van to be used exclusively for the business. She believes that the van has three years of useful life and then will have a resale value of $300.
Amanda has made a note in her diary whenever she has taken items from the business for her personal use. At 30th June she consults her diary and calculates that she has taken $950 cash and $20 worth of cleaning supplies during the period.
The loan made by her father is to be repaid in twenty four equal repayments. Each repayment is made on the last business day of the calendar month.Normally all of the work done by SVC is performed on account but one domestic customer insisted in paying in cash at the time the work was done. The customer paid $120 and Amanda decided that it was not worth producing an invoice for an amount which had already been received. All work done during the period has been invoiced. Invoices totalling $8,300 had been issued.
At 30thJuneAmanda’s customers owe her $900. Herdiary records list payments for supplies totalling $380, and at the end of the period she still has supplies that cost $60 on hand.She paid her employees $2,900, and still owes them $320 for their final week of work.During June Amanda paid her mobile telephone bill of $280 from her personal bank account. She estimates that 60% of the calls made were for the business purposes. She also has an unpaid bill for $125 from Keen Maintenance for a repair made to her floor polishing machine.
Required:
You must clearly show how you have calculated each amount shown on the statements, either by writing it next to the account name, for example Sales ($5 x 2,000) or by referencing the amount using a, b c etc. and putting your calculations for each of these at the bottom of the statement. For example, Sales (a) and then at the bottom of the statement put (a) and your calculation. Statements provided without calculations/explanations will receive no marks.
a) Prepare the business Income Statement for the period. (9 marks)
b) Prepare the Statement of Changes in Equity for the period. (6 marks)
c) Prepare the classified Balance Sheet at the end of the period. (10 marks)