Important information about the Hobby business: a. As you know, your friend does not have an accounting background, and therefore has not kept adequate records. They argued that they did not make enough to be considered a business. It was only a hobby and the money they made at the markets was only enough to cover the costs of purchasing supplies and equipment and the costs of excursions and field trips to go fossicking. Nevertheless, they kept a separate bank account for the Hobby business, the balance of the bank account at the beginning of the 2020 financial year was $3,270. Your friend had put $2,000 cash into the account when they opened it ortfolio Assessment Tasks - in detail BFA526 82 2020 three years ago. Other cash was held in petty cash. A float of $200 cash is always kept in the petty cash tin to use each weekend at the markets. b. On 1 July 2017 after joining the local Lapidary club, your friend loved the fossicking trips so much they purchased a 1986 Bundera Landcruiser 4x4 to be used only for that purpose. The price when new was $22,230, however your friend paid $2,500 given its age and condition. One of the wealthy club members offered a $5,000 interest free loan to your friend to purchase the vehicle, pay the registration transfer fee of $100 and to make improvements by adding a bullbar, which cost $1,500 and a recovery winch for $850. Your friend gratefully accepted the loan and promised to pay it back as soon as possible. At the start of the current financial year the loan was still outstanding. When you asked about depreciation and explained the concept, your friend suggested that the most appropriate method of depreciation for the motor vehicle would be the reducing balance method with a rate that was 1.5 times the straight-line rate. The vehicle is expected to be useful for 10 years, after which time the residual value would be nil. c. Two years ago, on 1 July 2018, your friend used personal savings to purchase a converted shipping container shed for $ 14,350. The shed is used to store supplies, tools, and equipment. It also provides a dedicated space for your friend to work on their hobby. They expect to sell the shed for $5,000 after using it for 5 years. The benefits from using the shed would be the same across all years. After 5 years they will consider building a permanent structure on their land, depending on business needs at the time and what decisions they make in relation to the business propositions they are currently considering