Need help on part a

10 5 Ping set up his own business buying, selling and servicing motorbikes. The business operates on both cash and credit basis. On 1 April 2015 he paid $250 000 into the business bank account. This money had been lent to him as an interest-free loan from his father. Ping had not kept any books of account. He approached an accountant and provided him with the following details of the business transactions: 1 On 1 April 2015 Ping had bought the following items paying by cheque: A motor vehicle for business use Tools and equipment Stock of goods for resale $ 80 000 45000 68 000 2 He paid the rent on business premises. The cost was $36000 for a whole year, payable monthly in advance. All instalments had been paid up to date. 3 Sale of motorbikes had been invoiced at $120 000 for the period. However, only $105000 of this amount had been received. 4 He had invoiced customers a total of $44000 for servicing for the period but was still owed $6000 of this amount. 5 Ping had been invoiced for further purchases of goods for resale of $188 000 At 31 December 2015 he still owed $23 000 of this amount 6 He also took $12000 a month for drawings. 7 At 31 December 2015 Stock of motorbikes for resale was $18000 He valued his motor vehicle at $60000 and his tools and equipment at $38 000 Early in January 2016 Ping received a letter from his bank manager stating that the business bank account was overdrawn. The bank manager asked Ping to come to the bank to discuss this. REQUIRED (a) Prepare the business balance sheet at 31 December 2015 [6] (b) Prepare a cash flow statement for the nine months ended 31 December 2015. clearly showing Ping's bank balance on that date. [9] (c) (0) Identify two areas of weakness in Ping's business. [2] (ii) Discuss the actions Ping should take to correct these weaknesses [4] (iii) Identify one other statement Ping could produce to help him analyse the performance of his business. [1] (iv) Discuss the benefits to Ping of preparing the statement identified in partc(iii). [3] [Total: 25] UCLES & MOE 2016 9755/02/01/16