Jason Vu offers tutoring services to first-year university students. He has set up a sole proprietorship business named JV Tutoring. Jason has collected the following information relating to his business activities at the end of the financial year:

The following information was disclosed from examining Jason’s bank statement:

Required

(a) Without preparing formal financial statements, calculate the following:
(i) profit/loss for the year (ii) total assets at the end of the year (iii) total liabilities at the end of the year (iv) Jason Vu’s capital balance at the end of the year (v) net cash inflow/outflow for the year.

(b) Recalculate the figures you provided in requirement (a), assuming that Jason had withdrawn $5000 in cash during the year.

(c) Jason cannot deal with the demand for tutoring services. Simon, Jason’s friend, is prepared to make a capital contribution and join the business as an owner. Visit www.business.gov.au/planning/business-structures-and-types to read more about choosing a business structure. Advise Jason on the relevant business structure to use and what he needs to do.

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Office supplies $1500 Accounts payable $1080 Office supplies expense 840 Cash at bank 8445 Telephone expense 255 Computer equipment 8250 Motor vehicle expense 330 Advertising expense 510 Accounts receivable 1500 Tutoring income 9750 Bank loan 7500