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Question: Electric Bike Store Pty Ltd (ABN 12 345 678 901) operates as a company and you are the accountant for them. Electric Bike Store Pty Ltd is a wholesale business specialising in electronic equipment made in Australia.

19 Oct 2022,1:30 AM

 

Case Study Background

Electric Bike Store Pty Ltd (ABN 12 345 678 901) operates as a company and you are the accountant for them. Electric Bike Store Pty Ltd is a wholesale business specialising in electronic equipment made in Australia. The business started its first month of the new year which started on 1st October 2021. You should have two months of data, being the manual accounting and the electronic accounting MYOB. You will need to have knowledge of the transactions that you entered in December and January to help you complete the cash flow statement. This is especially relevant with the Financing and Investing items

Requirements

You will need to prepare a cash flow statement for your business. The opening balance sheet, an income statement and closing balance sheet have been provided below.

Once you have completed a cashflow statement then you will be required to prepare a short analysis report on the financial position of the business.

 

Electric Bike Store Pty Ltd
Balance Sheet as at 30th  November 2021
ASSETS      
Current Assets      
Cash at Bank    $    8,419.00  
Accounts Receivable    $ 13,560.00  
Inventory    $    6,020.00  
Prepaid Insurance    $    1,200.00  
Stationery Supplies    $        545.00  
Total Current Assets      $ 29,744.00
Non-current Assets      
 Computers  $    3,000.00    
Accumulated Depreciation – Office Computers ($100.00)  $    2,900.00  
Warehouse Equipment  $ 22,000.00    
Accumulated Depreciation – Warehouse Equip. ($6,600.00)  $ 15,400.00  
Total Non-current Assets      $ 18,300.00
TOTAL ASSETS      $ 48,044.00
LIABILITIES      
Current Liabilities      
Accounts Payable    $    8,850.00  
Wages Payable    $    3,010.00  
Total Current Liabilities    $ 11,860.00  
Non-current Liabilities      
       
TOTAL LIABILITIES      $ 11,860.00
NET ASSETS      $ 36,184.00
OWNER'S EQUITY      
 Share Capital    $ 35,000.00  
 Retained Earnings    $    1,184.00  
TOTAL EQUITY      $ 36,184.00

 

Electric Bike Store Pty Ltd
Income Statement
For the two months ended 31st January 2022
     
INCOME    
Sales - 64,469.90  
     
COST OF SALES    
Cost of Goods Sold 39,760.00  
GROSS PROFIT   24,709.90
     
EXPENSES    
Wages Expense 10,710.00  
Rent Expense 2,000.00  
Telecommunication Expense 500.00  
Insurance Expense 600.00  
Vehicle Expense 125.00  
Stationery Expense 420.00  
Depreciation Expense 715.00  
Loss on the sale of assets 3,100.00  
Interest Expense 85.00  
     
     
TOTAL EXPENSES   18,255.00
     
NET PROFIT/(LOSS)   6,454.90

 

Electric Bike Store Pty Ltd
Balance Sheet
as at 31st January 2022
ASSETS      
Current Assets      
Cash at Bank   55,213.90  
Accounts Receivable   0.00  
Inventory   2,760.00  
Prepaid Rent   0.00  
Prepaid Insurance   600.00  
Stationery Supplies   125.00  
Total Current Assets     58,698.90
       
Non-current Assets      
 Computers 3,000.00    
Accumulated Dep'n – Office Computers (300.00) 2,700.00  
Forklift 21,500.00    
Accumulated depreciation Forklift (215.00) 21,285.00  
       
Total Non-current Assets     23,985.00
TOTAL ASSETS     82,683.90
       
LIABILITIES      
Current Liabilities      
Accounts Payable   15,000.00  
Wages Payable   0.00  
Prepaid Revenue   8,660.00  
       
Total Current Liabilities   23,660.00  
       
Non-current Liabilities      
 Loan - ABC Bank   16,385.00  
TOTAL LIABILITIES     40,045.00
NET ASSETS     42,638.90
OWNER'S EQUITY      
 Share Capital   35,000.00  
 Retained Earnings   7,638.90  
       
TOTAL EQUITY     42,638.90

 

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