Yamindi was raised on a farm in the Northern Territory. While in high school, he was an active member of the local rural youth club and raised several prize animals that he sold at auction at state and local shows. He saved his earnings and by the time he finished secondary school, Yamindi had nearly $5000 in a savings account. He was undecided whether to go on to tertiary education or use his savings in a business venture. Because of his love for animals, he believed he could successfully operate a pet warehouse store and decided to use the summer months as a trial.

During the month of October 2019, Yamindi located a small building that he could rent for $100 per month. After transferring $3000 from his savings account to a business bank account in the name of Pet Warehouse, he paid cash out of the account for rent and the purchase of supplies.

Although he would not keep a full set of accounting records, he decided to deposit all receipts from sales into the bank account and to make all payments by direct debit out of the account. In this way he would have a relatively complete record of his business activities. Yamindi also kept a daily work book in which he recorded all sales to customers.

On 1 November, Yamindi opened his warehouse to the public. During the first 3 months, he was unusually busy. Early in February 2020 he needed to make a decision on continuing the operation of the business or to enrol for the first semester at university. To help him make this important decision, Yamindi reviewed his bank account and daily sales book to determine how well he had done. The review disclosed the following information.

1. Total cash deposited in the account (including the initial $3000 deposit) was $8920.

2. The daily work book showed that on 31 January 2020 customers owed him $1000 for goods supplied, which he expected to collect during February.

3. Direct debits had been made out of the account for:

• rent payments, $400 for the months of November to February

• the purchase of grooming equipment, $4500. The equipment cost $5000 and Yamindi still owed the supplier $500 on the purchase

• grooming supplies, $560. Yamindi estimated that the cost of grooming supplies on hand at 31 January was $160

• the payment of electricity bills for the months of November and December, $600. He had just received his bill for the month of January for the amount of $350, but had not yet paid it

• advertising paid, $1216

• withdrawals made by Yamindi to pay for personal expenses, $1300.

Required

(a) Prepare an income statement for Yamindi’s Pet Warehouse for the 3-month period from 1 November 2019 to 31 January 2020.

(b) Prepare a balance sheet as at 31 January 2020 and a statement of changes in equity for the 3-month period.

(c) What other information would you need to determine how well Yamindi had done during the 3-month period?