Snazzy Simis Swirls Simi has just completed her first year of university (most of her classes were
Question:
Snazzy Simi’s Swirls Simi has just completed her first year of university (most of her classes were related to business administration) and is now in the midst of making a major career decision. Since her life savings have been depleted on tuition and housing costs, she has decided to take some time off from studies to work back home in Mission, BC. Simi’s current plan is to work full-time (six hours per day with Sundays off) as a server at a local restaurant called Paulie’s. Simi worked at Paulie’s in high school, so she has a good idea of what she can expect to earn. With tips, a $19 per hour average rate is reasonable for Monday through Thursday.
On the weekends, higher tipping typically increases the hourly rate by 10%. While she won’t have to pay full rent while living with her parents, Simi still expects her living costs to total $1,000 a month. To try to save up faster for three more years of college, Simi is planning on also growing her part-time online retail business. In the last year, she started painting cartoon portraits of students on the college campus, earning $50 per painting. The business concept started slowly, during a drunk Friday night with her friends in a dorm room of an art student. After a few other people approached her offering to pay for paintings of themselves, Simi decided to put some flyers up around campus. She believes she ended up selling 100 paintings at an average price of $50 each (she hasn’t kept track of the exact 2 numbers).
Required
Please prepare a business memo to Simi, addressing all issues raised in this case. (make valid assumptions where necessary).
Fundamentals Of Financial Accounting
ISBN: 9781265440169
7th Edition
Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby