Hans is a serial entrepreneur. He loves to start up a new business, but he gets...

 

 

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Hans is a serial entrepreneur. He loves to start up a new business, but he gets bored after about two months and moves on to something new. Hans was born in Denmark, but lives in Galveston, GA. Hans' latest venture is buying used BMW cars in Germany, and driving them to Moscow, Prague, Warsaw and Budapest to sell at a profit. He started this business buy depositing $50,000 in a bank account in Frankfurt. The results of the first month's trading have been as follow (all in S): Model Purchase Profit (loss) Reference Selling price 30,000 50,000 25,000 30,000 50,000 185,000 Price 3 Series Saloon 3 Series Convertible 5 Series Saloon 7 Series Estate 7 Series AMG (12,000) 42,000 40,000 25,000 29,000 20,000 156,000 10,000 2 3 1,000 30,000 29,000 4. 5 Total Hans incurred the following expenses (all in S) during the first month: Insurance Transport costs Travel and hotel expenses Commission Entertaining $5,000 10,000 2,000 5,000 5,000 27,000 Total All the transactions were undertaken in USS and they were all cash sales and cash purchases. However, the bank has notified Hans of its intention to charge S1,000 interest and currency charges for the first month. This should be included as an expense and a creditor. JAN2021 ACC2211 BA COURSEWORK / Page 2 of 3 Your Task: (1) Using the spreadsheet format, show both sides of cach of the transactions above (se pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit eamed to the amount of capital invested. (10 marke) Appendix: Hans Spreadsheet (Pro Forma) Owner's Liabilities Equity Capital Ref. no. Remark Income Expenditure Assets Sales Purchase Expenses Cash Accounts Payable Hans Trial Balance DR ($) CR (S) Your Task: (1) Using the spreadsheet format, show both sides of each of the transactions above (see pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit earned to the amount of capital invested. (10 marks) (4) If Hans asks your opinion about investing $800,000 in a new computer system (for another new business venture), what would be your advice? professional answer using the accounting framework, i.e. impact on the components of the accounting equation. Give a comprehensive and (14 marks) (Total 50 marks) Appendix: Hans Spreadsheet (Pro Forma) Ref. no. Expenditure Assets Owner's Liabilities Remark Income Equity Capital Sales Purchase Expenses Cash Accounts Payable Hans Trial Balance DR ($) CR (S) Hans is a serial entrepreneur. He loves to start up a new business, but he gets bored after about two months and moves on to something new. Hans was born in Denmark, but lives in Galveston, GA. Hans' latest venture is buying used BMW cars in Germany, and driving them to Moscow, Prague, Warsaw and Budapest to sell at a profit. He started this business buy depositing $50,000 in a bank account in Frankfurt. The results of the first month's trading have been as follow (all in S): Model Purchase Profit (loss) Reference Selling price 30,000 50,000 25,000 30,000 50,000 185,000 Price 3 Series Saloon 3 Series Convertible 5 Series Saloon 7 Series Estate 7 Series AMG (12,000) 42,000 40,000 25,000 29,000 20,000 156,000 10,000 2 3 1,000 30,000 29,000 4. 5 Total Hans incurred the following expenses (all in S) during the first month: Insurance Transport costs Travel and hotel expenses Commission Entertaining $5,000 10,000 2,000 5,000 5,000 27,000 Total All the transactions were undertaken in USS and they were all cash sales and cash purchases. However, the bank has notified Hans of its intention to charge S1,000 interest and currency charges for the first month. This should be included as an expense and a creditor. JAN2021 ACC2211 BA COURSEWORK / Page 2 of 3 Your Task: (1) Using the spreadsheet format, show both sides of cach of the transactions above (se pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit eamed to the amount of capital invested. (10 marke) Appendix: Hans Spreadsheet (Pro Forma) Owner's Liabilities Equity Capital Ref. no. Remark Income Expenditure Assets Sales Purchase Expenses Cash Accounts Payable Hans Trial Balance DR ($) CR (S) Your Task: (1) Using the spreadsheet format, show both sides of each of the transactions above (see pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit earned to the amount of capital invested. (10 marks) (4) If Hans asks your opinion about investing $800,000 in a new computer system (for another new business venture), what would be your advice? professional answer using the accounting framework, i.e. impact on the components of the accounting equation. Give a comprehensive and (14 marks) (Total 50 marks) Appendix: Hans Spreadsheet (Pro Forma) Ref. no. Expenditure Assets Owner's Liabilities Remark Income Equity Capital Sales Purchase Expenses Cash Accounts Payable Hans Trial Balance DR ($) CR (S)

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