Azman paid RM 380 000 to purchase a business entirely. The business has RM 50 000...

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Azman paid RM 380 000 to purchase a business entirely. The business has RM 50 000 of debt, car, van, baking machine, café fitting and cutleries worth RM 75 000, RM 110 000, RM 14 000, RM 20 000 and RM 8 000 respectively. The business also left with RM 50 000 of cash in hand. The van is expected to be useful for another 9 years with the annual depreciation of RM 10 000. He sold the car slightly below the market value with loss of RM 12 000 to fund this business. On top of that, he applied personal loan of RM 50 000 as a backup in case the business requires additional capital. The business is operating in a rented premise with RM 45 000 of annual rental. The business is expected to last for 3 years with current financial position. 1. Calculate the following for previous and new business: - (SOMULU & HANZALAH) a. Total assets b. Total capital c. Total liabilities 2. Generate the accounting equation based on your answer in (1). - (SOMULU & HANZALAH) 3. Explain at least FOUR (4) possible revenues for the business. - (PAVITRAN) 4. Explain on why Azman willing to pay more than the asset value of the business. Discuss on the effects of this transaction to the business. - (PAVITRAN) 5. Suggest on the measures to be taken by Azman to make sure that the business can last longer. - (CARMEL) 6. Calculate the salvage value and depreciation rate of the van. - (CARMEL) Azman paid RM 380 000 to purchase a business entirely. The business has RM 50 000 of debt, car, van, baking machine, café fitting and cutleries worth RM 75 000, RM 110 000, RM 14 000, RM 20 000 and RM 8 000 respectively. The business also left with RM 50 000 of cash in hand. The van is expected to be useful for another 9 years with the annual depreciation of RM 10 000. He sold the car slightly below the market value with loss of RM 12 000 to fund this business. On top of that, he applied personal loan of RM 50 000 as a backup in case the business requires additional capital. The business is operating in a rented premise with RM 45 000 of annual rental. The business is expected to last for 3 years with current financial position. 1. Calculate the following for previous and new business: - (SOMULU & HANZALAH) a. Total assets b. Total capital c. Total liabilities 2. Generate the accounting equation based on your answer in (1). - (SOMULU & HANZALAH) 3. Explain at least FOUR (4) possible revenues for the business. - (PAVITRAN) 4. Explain on why Azman willing to pay more than the asset value of the business. Discuss on the effects of this transaction to the business. - (PAVITRAN) 5. Suggest on the measures to be taken by Azman to make sure that the business can last longer. - (CARMEL) 6. Calculate the salvage value and depreciation rate of the van. - (CARMEL)

Answer rating: 100% (QA)

1 a Previous business Assets Car RM110000 Van RM14000 Baking machine RM20000 Caf fitting RM8000 Cash ... View the full answer