1. The relevant information from your first three months of trading is as follows: 
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3. Finance You started up the business by investing your life savings of £100,000 in it.  You also took a small business start-up loan of £100,000 from your bank.
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5. Purchases You have added up the invoices relating to the purchases of the bottled beer and found that they totaled £240,000.  However, your suppliers have been allowing you one month's credit so you know that one third of this total has not been paid yet, although you have received the goods.
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7. You also bought a delivery van in June for £120,000 (paid when the van was delivered in June).  You expect the van to last five years after which you hope to be able to sell it for £20,000.
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9. Revenue The orders have been flooding in and the total value of sales invoices comes to £600,000.  You give your customers one month to pay, so again one third of this money is yet to be received although the goods have been delivered to the customers.
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11. You also have approximately £150,000 of provisional orders waiting for confirmation.
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13. Expenses The premises you operate from are rented.  The rent is £100,000 per annum, payable twice a year in advance, so you have paid the £50,000 up to the end of November.
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15. You employ six workers whose wage costs in total for the three months were £180,000.
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17. You also sent two of your staff on a training cost which cost a total of £5,000.
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19. You have paid £4,000 interest on the bank loan for the three-month period.  The whole of the loan is still outstanding.
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21. You are still waiting for the council to tell you how much your business rates will be but expect them to be around £60,000 for the year.
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23. Petrol and other sundry expenses, amounting to £30,000 have been paid for during the quarter.
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25. Cash and Bank Your bank statement at 31 August showed that you had £50,900 in your current account.  There were not outstanding cheques or deposits at that date.  In the petty cash tin there was £100.
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27. Inventories At 31 August you did an inventory count which showed that you had 8,000 bottles unsold. These cost you £5 each and you expect to be able to sell them for £15 each.
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29. Summarize this information for your bank manager by preparing two separate documents.
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31. Show the profit or loss for the three-month period by preparing an income statement.
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33. Prepare a Balance sheet as at 31 August.

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Income Statement for the ThreeMonth Period Ended August 31 Particulars Amount Sales Revenue 600000 L... View the full answer