Case Study Analysis Report

Assessment $2$

Weight $20\%$

Read the following case and answer the questions.

Stage $1$ You tried to establish a business. You invested $$1000$ to this business.

Stage $2$ You borrowed $$500$ from a bank.

Stage $3$ You spent $$400$ to acquire a machine.

Stage $4$ You borrowed a car from a business partner. This car was valued at $$600.$

Stage $5$ You spent $ $800$ to buy goods from a supplier.

Stage $6$ You sold half goods to customers and received $ $600$ cash.

Stage $7$ You repaid $$300$ to the bank.

Question $(1)$: Construct the accounting equation in each stage.

Question $(2)$: List all relevant accounts and their values at the end of the case.

Question $(3)$: Comment on how the accounting equation changes across different stages.

Question $(4)$ Identify Cost of Goods Sold in this case. And explain why it is an expense.

Question $(5)$ In Stage $3,$ you spent $$400$ to buy a machine. Explain why it is not an expense.