Bryan Goosling has just finished his training as a fitness instructor and personal trainer. He has been working part-time during his training program in a local gym, and has saved $15,000 over the past 2 years. Bryan decided he would like to open his own business as a personal trainer, so he filed all the necessary paperwork to form a limited company, opened a business bank account, and transferred the $15,000 in exchange for shares in the new company named ProFIT Ltd.  He also borrowed an additional $10,000 from the bank.

Bryan has been very busy in his new business, getting new clients, purchasing equipment, and scheduling fitness sessions. Unfortunately, without any accounting training, he has not kept formal financial records. What he has done:  deposited all the money received from his clients into and paid all of the business expenses out of the business bank account; recorded in his diary all fitness sessions delivered for which clients still owe him money. 

Bryan has printed out his bank statements for the first 6 months (1 April 2019 to 30 September 2019), has reviewed other invoices and bills he has received in that time period, and has prepared the following information:

1.       The bank statements show that the total amount of money deposited into the account for the 6-month period was $34,000, which included the $15,000 share issuance and the $10,000 bank loan.

 

2.      Total payments over the six months were for $7,500, consisting of the following:

(a) Rent, $750.

(b) Electricity, $850.

(c) Telephone, $450.

(d) Purchase of equipment, $3,700.

(e) Advertising flyers (all distributed), $500.

(f) Wages $950.

(g) Interest on loan $300

 

3.      Bryan has recorded in his diary that clients owe him $800 as at 30 September for fitness sessions he has already delivered.

 

4.       On 1 September, he declared and paid a $1,200 dividend to himself.

 

5.        Bryan has received invoices for the following, which will be paid in October:

(a) Water bill, $350.  

(b) Telephone, $110.

 

6.        Bryan owes $50 of interest on the loan, payable on 1 October 2020.

 

7.        Income taxes are estimated at 30% of pre-tax profit.

Required:

Prepare a Statement of Comprehensive Income for ProFIT Ltd for the 6-month period ending 30 September 2019

Answer rating: 100% (QA)

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