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Marc quit his job and started Marathon Camp for young adults. Marc asks you to help him prepare financial statements at the end of his
Marc quit his job and started Marathon Camp for young adults. Marc asks you to help him prepare financial statements at the end of his first year of operations. He relates the following facts about his business activities.
- In order to get the business off the ground, he decided to start a private company. He issues shares in Marc Mara Pty Ltd to a few close friends, as well as buying some of the shares himself. He initially raised $75,000 through these shares. In addition, he took a bank loan for $100,000 from Unity Bank.
- He purchased a bus for transporting his clients for $40,000 cash.
- He purchased equipment for $3,000 cash.
- He earned fees from his clients during the year $200,000, but had collected only $140,000 of this amount. His clients still owed him $60,000.
- He rents a local school playground for $150 per day. Total rental expenses for the playground were $8,000, insurance was $20,000, salary expenses were $45,000, and administrative expenses were $15,700, all of which were paid in cash.
- The company incurred $2,000 in interest expense on the bank loan which was not paid at the end of the year.
- The company paid dividends during the year $16,000 cash.
- The balance in the companys bank account at the end of the year, 30 June 2020, was $ 167,300.
For the year ended 30 June 2020, prepare a (a) Statement of Financial Performance (Profit and Loss) (b) Statement of Changes in Equity (Retained Earnings) (c) Statement of Financial Position (Balance Sheet) (d) Statement of Cash Flows
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