Sadia has been managing her gym business for a year. On 1 November 2018 she opened...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sadia has been managing her gym business for a year. On 1 November 2018 she opened a business bank account and paid in £50,000 of her own money. The bank provided her with a 5 year loan of £50,000 which was paid into this account on the same day. The loan carries an interest rate of 5% and is repayable in fuil on 31 October 2023. The following transactions took place during the financial year ended 31 October 2019 1. Cash received from gym memberships totalled up to £240,000. Of this £240,000 received, £12,000 relates to membership subscriptions for the financial year ended 31 October 2020. Cash received from non-member daily visitors to the gym during the year was £30,000. 3. 2. Sadia paid rent on the gym of £24,000 and local business taxes of £13,000. Rent paid was for the 10 months November 2018 to August 2019 while the local business taxes paid covered the amounts payable for the 13 months to 30 November 2019. 4. The gym has a bar serving, snacks, light meals and drinks. Cash received from bar sales inthe year to 31 October 2019 totalled up to £60,000. Sadia's purchases of food and drink for sale at the bar added up to a total of £26,000 for the year. At 31 October 2019, Sadia still owed her food and drink suppliers £3,750. At 31 October 2019, Sada counted up and valued the drinks and food left in the bar at that date. This inventory had a cost of £2,200. Sadia employed various members of staff during the year, paying them a total of £51,000. At 31 October 2019, Sadia still owed her staff £1,000 in wages and salaries for services provided in the last week of the financial year. 7. Heating and lighting bills paid from the start of November 2018 to the end of August 2019 totalled up to £7,500. Sadia estimates that a further £1,500 of heating and lighting was used during September and October 2019 which has not yet been paid for. 8. Sadia paid £200,000 to acquire equipment for her gym at the start of November 2018. Sadia estimates that this gym equipment will have a useful life of 4 years and will have a resale value of £40,000 at the end of those 4 years. in addition, Sadia paid equipment rentals of £40,000 throughout the year to hire additional equipment for use in the gym. These equipment rentals covered the cost of equipment hire for the period 1 November 2018 to 31 January 2020. 5. 6. 9. 10. Sadia paid £12,000 for 12 months business insurance on 1 November 2018. 11. Water costs for the gym for the year totalled up to £18,000. At 31 October 2019, Sadia still owed her water suppliers £1,600. 12. Sadia withdrew £2,000 each month from the business bank account for her own personal expenditure. 13. Cleaning and maintenance costs paid during the year were £3,800. There were no cleaning or maintenance costs due for payment or paid in advance at 31 October 2019. 14. Interest on the bank loan for the year was paid on 31 October 2019. 15. Bank charges for the first 11 months of the financial year deducted from Sadia's bank account were £880. Sadia's bank manager has informed her that the bank charges for October 2019 will be £75 and these will be deducted from her bank account during November 2019. All cash received during the year was paid into the business bank account and all amounts paid during the year were paid out of the business bank account. Required i. Prepare a statement of profit or loss for Sadia's gym business for the financial year ended 31 October 2019 together with a statement of financial position at that date. Sadia has been managing her gym business for a year. On 1 November 2018 she opened a business bank account and paid in £50,000 of her own money. The bank provided her with a 5 year loan of £50,000 which was paid into this account on the same day. The loan carries an interest rate of 5% and is repayable in fuil on 31 October 2023. The following transactions took place during the financial year ended 31 October 2019 1. Cash received from gym memberships totalled up to £240,000. Of this £240,000 received, £12,000 relates to membership subscriptions for the financial year ended 31 October 2020. Cash received from non-member daily visitors to the gym during the year was £30,000. 3. 2. Sadia paid rent on the gym of £24,000 and local business taxes of £13,000. Rent paid was for the 10 months November 2018 to August 2019 while the local business taxes paid covered the amounts payable for the 13 months to 30 November 2019. 4. The gym has a bar serving, snacks, light meals and drinks. Cash received from bar sales inthe year to 31 October 2019 totalled up to £60,000. Sadia's purchases of food and drink for sale at the bar added up to a total of £26,000 for the year. At 31 October 2019, Sadia still owed her food and drink suppliers £3,750. At 31 October 2019, Sada counted up and valued the drinks and food left in the bar at that date. This inventory had a cost of £2,200. Sadia employed various members of staff during the year, paying them a total of £51,000. At 31 October 2019, Sadia still owed her staff £1,000 in wages and salaries for services provided in the last week of the financial year. 7. Heating and lighting bills paid from the start of November 2018 to the end of August 2019 totalled up to £7,500. Sadia estimates that a further £1,500 of heating and lighting was used during September and October 2019 which has not yet been paid for. 8. Sadia paid £200,000 to acquire equipment for her gym at the start of November 2018. Sadia estimates that this gym equipment will have a useful life of 4 years and will have a resale value of £40,000 at the end of those 4 years. in addition, Sadia paid equipment rentals of £40,000 throughout the year to hire additional equipment for use in the gym. These equipment rentals covered the cost of equipment hire for the period 1 November 2018 to 31 January 2020. 5. 6. 9. 10. Sadia paid £12,000 for 12 months business insurance on 1 November 2018. 11. Water costs for the gym for the year totalled up to £18,000. At 31 October 2019, Sadia still owed her water suppliers £1,600. 12. Sadia withdrew £2,000 each month from the business bank account for her own personal expenditure. 13. Cleaning and maintenance costs paid during the year were £3,800. There were no cleaning or maintenance costs due for payment or paid in advance at 31 October 2019. 14. Interest on the bank loan for the year was paid on 31 October 2019. 15. Bank charges for the first 11 months of the financial year deducted from Sadia's bank account were £880. Sadia's bank manager has informed her that the bank charges for October 2019 will be £75 and these will be deducted from her bank account during November 2019. All cash received during the year was paid into the business bank account and all amounts paid during the year were paid out of the business bank account. Required i. Prepare a statement of profit or loss for Sadia's gym business for the financial year ended 31 October 2019 together with a statement of financial position at that date.
Expert Answer:
Answer rating: 100% (QA)
Statement of Profit or Loss for Sadias gym business for the year ended 31 October 2019 Particulars Amount Amount Service Revenue From Gym Members 240000 Less Gym Membership Fees Received in Advance 12... View the full answer
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
Students also viewed these accounting questions
-
onathon's Restaurant's has a portfolio of 7 proposed projects over a 5 year planning horizon. Unfortunately, the total requested funding (all amounts specified in millions) is $921 and Jonathon's has...
-
The following cash transactions took place during August, the first month of business for Comfy Cushions Cleaning, a corporation: a. Justin Snyder started the company by contributing $30,000 cash and...
-
The following cash transactions took place during July 2010, the first month of business for Stay Bright Cleaning Supplies, Inc.: a. Bill Lunden started a business, Stay Bright Cleaning Supplies,...
-
Prove that e is an irrational number using the following argument by contradiction. Suppose that e = M/N, where M, N are nonzero integers. (a) Show that M!e- is a whole number. (b) Use the power...
-
Squirt Squad is a cleaning service that sends crews to residential homes on either a once a month or a twice a month schedule, depending on the customers preference. The owner would like to predict...
-
The number of hits per day on the Web site of Professional Tool, Inc., is normally distributed with a mean of 700 and a standard deviation of 120. a. What proportion of days has more than 820 hits...
-
Draw a Graph for Income vs College! The New York Times created an interesting interactive graph on income versus percent of children who attend college. They ask you to first draw what you think the...
-
A company issues a $6,000,000, 12%, five-year bond that pays semiannual interest of $360,000 ($6,000,000 12% ), receiving cash of $6,463,304. Journalize the bond issuance.
-
P3.1 (LO 1, 2, 3) (Multiple-Step Statement, Retained Earnings Statement) The following information is related to Dickinson Company for 2025. Retained earnings balance, January 1, 2025 Sales revenue...
-
Barolo Company manufactures laptop stickers for Italian sports teams. Barolo's risk management team has identified the company's top five inherent risks and plans to manage them using a typical ERM...
-
In the figure shown, is a chemical reaction occurring? A) No, because there is no change occurring B) Yes, because a precipitate will be formed when the water and NaCl are mixed. C) No, because the...
-
How would you reconcile your role as a loyal employee and team player with your need to uphold ethical standards?
-
Arnold and Barbara Cane were divorced in June 2018. Pursuant to the divorce decree, Arnold is obliged to perform as follows: a. Transfer title of their personal home to Barbara. They purchased the...
-
A company that gives employees an amount of stock based on the time the person has worked there is running a(n) a. ESOP b. AESOP c. 401k d. IRA
-
Refer to the Pennsylvania Indemnity Co. case in a citator. What was the disposition of the case on appeal to the Supreme Court from the Court of Appeals?
-
Thomas and Tonya Taylor purchased a home for $125,000 on September 15, 2017. On October 8, 2018, they were divorced, and as part oft he divorce agreement, the home was transferred to Thomas, who sold...
-
1. Stale, overused phrases that have lost their vigor are known as ----- expressions.? a. trite b. frontloaded c. empty 2. Which of these are examples of buried verbs ? Check all that apply. a....
-
Suppose the concentration of glucose inside a cell is 0.1 mm and the cell is suspended in a glucose solution of 0.01 mm. a. What would be the free energy change involved in transporting 10-o mole of...
-
When should inventory be valued at its net realizable value?
-
Sperry Space and Aeronautics is a research and development firm that contracts with the government to design specialized equipment for use in the NASA space shuttle program. Its income statements and...
-
What adjusting entries to Inventory are required when the perpetual inventory method is used?
-
How can environmental agents that do not cause gene mutations contribute to cancer?
-
With regard to genotypes, what is a true-breeding organism?
-
With regard to biological evolution, which of the following statements is incorrect? Explain why. A. During its lifetime, an animal evolves to become better adapted to its environment. B. The process...
Study smarter with the SolutionInn App