David Mark is a sole trader who owns and operates supermarkets in each of three villages near Ousby. He has drafted his own accounts for the year ended 3 I May 20X4 for each of the branches. They are as follows:

The figures for the year ended 3 I May 20X4 follow the pattern of recent years. Because of this, David Mark is proposing to close the Clifearn supermarket immediately.
David Mark employs 12 full-time and 20 part-time staff. His recruitment policy is based on employing one extra part-time assistant for every £30,000 increase in branch sales. His staff deployment at the moment is as follows:

Required:

(a) A report addressed to David Mark advising him whether to close Clifearn supermarket. Your report should include a detailed financial statement based on the results for the year ended 3 I May 20X4 relating to the Clifearn branch.

(b) Calculate the increased turnover and extra staff needed if Peter’s suggestion is implemented.

(c) Comment on the social implications for the residents of Clifearn if (i) David Mark closes the supermarket, (ii) Peter Gaskin’s recommendation is undertaken.
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Arton Blendale Clifeom Sales Cost of sales Gross profit 910,800 633,100 277,700 673,200 382,800 504,900 287,100 168,300 95,700 Less: Expenses: David Mark's salary 10.560 10,560 10,560 Other salaries and wages 143,220 97,020 78,540 Rent 19,800 Rates 8,920 5,780 2,865 Advertising 2.640 2,640 2,640 Delivery van expenses 5,280 5,280 5,280 General expenses 11,220 3,300 1,188 Telephone 2,640 1.980 1,584 Wrapping materials 7,920 3,960 2,640 Depreciation: Fixtures 8,220 4,260 2,940 Vehicle 3,000 203.620 3,000 157,580 3,000 111,237 Net profit/(loss) 74,080 10,720 (15,537)