Simon has recently gone into business making meat pies. Details of his transactions for the first month are given below.

Day 1 Day 2 Day 3 Day 3 Day 31 Opened a bank account and paid in £20 000 of his own money.

Purchased an oven to make pies at a cost of £10000.

Paid rent for production space for the first month of £200.

Bought the following supplies for cash:

1100 lb of flour at 60p per lb.

1100 lb of meat at £1 per lb.

Withdrew £1000 to pay a pressing personal debt.

to 31 Made 4000 pies and sold 3900 pies.

Each pie takes 4 oz of flour and 4 oz of meat and was sold for £1.

At the end of the month he still had in stock the expected 100 lb of flour, 100 lb of meat and 100 finished meat pies.

Paid himself £1600 wages for the month. He estimates that half his time is spent on production and the rest on selling and administration.

Paid production overheads of £120 for the month.

Paid administration expenses of £50 for the month.

(a) Draw up a worksheet, balance sheet and profit and loss account for Simon's business.

(b) Comment on the performance of the business.