Hans is a serial entrepreneur. He loves to start up a new business, but he gets bored after about two months and moves on to something new. Hans was born in Denmark, but lives in Galveston, GA Hans" latest venture is buying used BMW cars in Germany, and driving them to Moscow, Prague, Warsaw and Budapest to sell at a profit. He started this business buy depositing $50,000 in a bank account in Frankfurt The results of the first month's trading have been as follow (all in S): Model Selling Purchase Profit (loss) Reference price Price 3 Series Saloon 30,000 42,000 (12,000) 1 3 Series Convertible 50,000 40,000 10,000 2 5 Series Saloon 25,000 25.000 0 3 7 Series Estate 30,000 29,000 1,000 4 7 Series AMG 50,000 20.000 30,000 5 Total 185.000 156,000 29,000 Hans incurred the following expenses (all in S) during the first month: Insurance $5,000 Transport costs 10,000 Travel and hotel expenses 2,000 Commission 5,000 Entertaining Total 27,000 All the transactions were undertaken in USS and they were all cash sales and cash purchases. However, the bank has notified Hans of its intention to charge S1.000 interest and currency charges for the first month. This should be included as an expense and a creditor 5,000 JAN2021 ACC2211 BA COURSEWORK / Page 2 of 3 Your Task: (1) Using the spreadsheet format, show both sides of cach of the transactions above (see pro forma in the appendix) (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix), (9 marks) (3) Write a paragraph comparing the profit earned to the amount of capital invested. (10 mark Appendix Hans Spreadsheet (Pro Forma) Relno. Remark Income Expenditure Assets Owner's Liabilities Equity Capital Accounts 1 Sales Purchase Expenses Cash Payable Hans Trial Balance DR (5) CR (5) FE MacBook Air 10. 1 5 4 % 5 7 B 9 1 2 3 E R T Y G . 3 K F S D cops lock N B V M N C 00 90 Com control option command s SOUTH DAKOTA Your Task: (1) Using the spreadsheet format, show both sides of each of the transactions above (see pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit earned to the amount of capital invested. (10 marks) (4) If Hans asks your opinion about investing $800,000 in a new computer system (for another new business venture), what would be your advice? Give a comprehensive and professional answer using the accounting framework, i.e. impact on the components of the accounting equation. (14 marks) (Total 50 marks) I Appendix: Hans Spreadsheet (Pro Forma) Ref. no. Remark Income Expenditure Assets Liabilities Owner's Equity Capital Sales Purchase Expenses Cash Accounts Payable I Hans Trial Balance DR ($) CR ($)
