Exercise 2.3: Climb On!

Worked Example 1.1 in Chapter 1 provided the following information:

For a long time, you have been wondering how to convert your passion for rock climbing into a business opportunity. During a recent climbing trip you met Chris, a climbing-gear designer. He agreed to give you 100 chalk bags and 100 climboriented t-shirts for $4 and $5 respectively. You came to an agreement with him that you’d make payments on an ad-hoc basis as the goods were sold. As soon as you arrived home you listed the first 30 chalk bags and 50 t-shirts on an internetbased auction site. These sold within 3 days of listing them for $8 and $10 respectively. Half of these customers paid immediately. You offered 20 day terms on the sales and your past experiences tell you that customers tend to take full advantage of this policy.

Required:

Based on this information, prepare a statement of financial position and an income statement.