Accounting for Managers (ACC00724) S2, 2019 Assignment 1 (20 Marks) QUESTION 1 (10 Marks) Ken Kennett Building Services is a local business operating in the housing industry ken kennen o formal accounting system and does not use financial statements for decision making. However he is negotiating a contract with a supplier of building materials who wants to see his financia statements to ensure that Kencan meet his payments each month, Ken has asked you to prepare Financial statements. Based on his last tax return and the content of his shoebox (where he keeps his invoices and receipts) for this year, you have recorded the following items $500 Cash in the shoebox (with the receipts and invoices) 3,800 Cash in the bank account 550,000 Building services provided Amounts owed by customers Wages paid to employees Wages owed to the employees Equipment Building supplies used Building supplies on hand 80,000 150,000 3,500 68,000 310,000 18,000 30,000 32,000 5,600 4,000 5,700 Amounts owed to suppliers Motor vehicle Motor vehicle expenses Electricity and telephone expenses Cash used by Ken for personal expenditure REQUIRED: A. Using the information above, prepare a statement of financial performance (income statement and a statement of financial position (balance sheet) for Ken Kennett Building Services ( 6 Marks) B. How would the financial statements you provide help the supplier of building materials decide whether or not to trade with Ken? What parts of the financial statements would be positive indicators that Ken Kennett Building Services would be able to pay for supplies on time and what items may cause some concern for the suppliers? (4 Marks) Accounting for Managers (ACC00724) S2, 2019 Assignment 1 (20 Marks) QUESTION 1 (10 Marks) Ken Kennett Building Services is a local business operating in the housing industry ken kennen o formal accounting system and does not use financial statements for decision making. However he is negotiating a contract with a supplier of building materials who wants to see his financia statements to ensure that Kencan meet his payments each month, Ken has asked you to prepare Financial statements. Based on his last tax return and the content of his shoebox (where he keeps his invoices and receipts) for this year, you have recorded the following items $500 Cash in the shoebox (with the receipts and invoices) 3,800 Cash in the bank account 550,000 Building services provided Amounts owed by customers Wages paid to employees Wages owed to the employees Equipment Building supplies used Building supplies on hand 80,000 150,000 3,500 68,000 310,000 18,000 30,000 32,000 5,600 4,000 5,700 Amounts owed to suppliers Motor vehicle Motor vehicle expenses Electricity and telephone expenses Cash used by Ken for personal expenditure REQUIRED: A. Using the information above, prepare a statement of financial performance (income statement and a statement of financial position (balance sheet) for Ken Kennett Building Services ( 6 Marks) B. How would the financial statements you provide help the supplier of building materials decide whether or not to trade with Ken? What parts of the financial statements would be positive indicators that Ken Kennett Building Services would be able to pay for supplies on time and what items may cause some concern for the suppliers? (4 Marks)