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Case study: Ebikum Ltd. Imagine it is now 31 March 2022. When Hans left university, he decided to run a business selling and repairing

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Case study: Ebikum Ltd. Imagine it is now 31 " March 2022. When Hans left university, he decided to run a business selling and repairing e-bikes. In order to do this, he set up a limited company. Ebikum Limited. He planned to deposit f.500 in the company's bank acoount on 1 January 2022, in exchange for 500 shares, with a nominal value of Cl each. He also planned for the company to borrow 8,000 from his father. Hans planned to rent premises for his business at c2.000 a month and lease test and IT equipment for $580 a month. He would pay 4,000 for signage and furniture. For each of the first two months he would spend $7,500 on bikes for resale and components for repairs. In the third month he hoped to buy {7,000 of bikes on credit. At the outset, he would hire a technician, at a cost of f2,000 a month, to do the repair work, whilst he mostly dealt with seling and administration. He would pay himself f1,000 a month in salary and planned to take further income as dividends. He estimated that he would use 200 worth of electricily per month and expected to get the first bill at the beginning of Apnil. He would pay 1,200, in January, for 12 months' insurance. Other expenses paid for during the frst 3 months would be: Each month he hoped to sell bikes for 28.700 and charge 2.500 for repairs. A the end of 3 months he estimated that he would have inventory, of unsold bikes. which would have cost nim ,10,000. He estimated that woar and tear on the long-term asses of the business would amount to about 800 a year, so they would need replacing after about 5 years ( 5 E800=[4,000). Now that he has been trading for 3 months. Hans has peoduced a budgetary control report and cashflow statement for the 3 months and a Statement of Financial Position for 31 March. These are shown below. 3 N1091 INTRODUCTION TO ACCOUNTING, MANAGEMENT He spent an extra 1,000 on advertising, which increased the volume of both sales and repairs by 20%. Hans's father would very much lke his $8,000 back, so Hans needs to oonsider how he might be able to repay the loan. He is reluctant to approach frlends or relations

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