Melissa Parker is considering the merits of buying a small caf in Adelaide The caf is fully furnished and equipped The business has been operating for the last 3 years The caf premises are not owned, but leased The current lease expires in two years, but there are options for a further five year term in place The current lease costs $30,000 per annum in rent The current owner, Philip Taylor, started the business in 2017 with a capital of $75,000 He is asking for a price of $100,000 for the business Philip provided the following information Table 1 info for the year Sales revenue 400000 Cost of sales 175000 Gross profit 225000 Other expenses 277000 loss 52000 Upon a request from Melissa, Philip provided the following information about the other expenses of $277,000 from the records of the business Table 2 Information about other expenses Coffee machine $ 100000 insurance 6000 Computer software 15000 Telephone usage 4000 Interest paid to bank 2000 Car maintenance expense 8000 furniture 50000 Servicing of coffee machines 8000 internet 2000 electricity 10000 Water bill 7000 Advertising membership 25000 Lease rent 30000 Shop cleaning 10000 Total $ 277000 In addition, Philip informed the following The business took a bank loan of $50,000, which is repayable in 2024 Accounts payable and cash balance as at June 30, 2020 are $5,000 and $31,500 respectively The owner takes out $500 every week from the business All sales are cash sales Following detailed discussions with Philip, Melissa discovered that No attempt has been made to segregate personal and business expenses Electricity, water and car maintenance were estimated to be 80 business and 20 owners personal purposes The coffee machine, computers software and furniture were bought on July 1, 2019 and estimated to have a useful life of 5 years each Tax rate of 30 Questions Prepare a Statement of Financial Performance and Statement of Financial Position for the year ended June 30, 2020 and as at June 30, 2020 respectively

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Melissa Parker is considering the merits of buying a small caf in Adelaide. The caf is fully furnished and equipped. The business has been operating

Melissa Parker is considering the merits of buying a small caf in Adelaide. The caf is fully furnished and equipped. The business has been operating for the last 3 years. The caf premises are not owned, but leased. The current lease expires in two years, but there are options for a further five-year term in place. The current lease costs $30,000 per annum in rent.

The current owner, Philip Taylor, started the business in 2017 with a capital of $75,000. He is asking for a price of $100,000 for the business. Philip provided the following information:

Table 1 : info for the year
Sales revenue	400000
Cost of sales	175000
Gross profit	225000
Other expenses	277000
loss	-52000

Upon a request from Melissa, Philip provided the following information about the other expenses of $277,000 from the records of the business:

Table 2 Information about other expenses

Coffee machine	$ 100000
insurance	6000
Computer & software	15000
Telephone usage	4000
Interest paid to bank	2000
Car maintenance expense	8000
furniture	50000
Servicing of coffee machines	8000
internet	2000
electricity	10000
Water bill	7000
Advertising & membership	25000
Lease rent	30000
Shop cleaning	10000
Total		$ 277000

In addition, Philip informed the following:

The business took a bank loan of $50,000, which is repayable in 2024.
Accounts payable and cash balance as at June 30, 2020 are $5,000 and $31,500 respectively.
The owner takes out $500 every week from the business.
All sales are cash sales.

Following detailed discussions with Philip, Melissa discovered that:

No attempt has been made to segregate personal and business expenses. Electricity, water and car maintenance were estimated to be 80% business and 20% owners personal purposes.
The coffee machine, computers & software and furniture were bought on July 1, 2019 and estimated to have a useful life of 5 years each.
Tax rate of 30%

Questions

Prepare a Statement of Financial Performance and Statement of Financial Position for the year ended June 30, 2020 and as at June 30, 2020 respectively.