One of your friends Sammy is about to prepare the 31 March balance sheet for her new business, Tasty Cookie shop. This is Tasty Cookies first month of operation, and Sammy is also going to calculate the first months net income. She needs to prepare the balance sheet and calculate net income so she can pass the information along to her parents. They loaned her $5000 so that she could start the business.

Although Sammy thinks that business is booming, she has a big problem. She does not know enough about accounting to prepare the balance sheet to calculate Marchs net income. As a matter of fact, Sammy had never heard the words balance sheet and net income until her parents asked her to promise to give them these statements every month before they would agree to loan Sammy the $5000.

Luckily, Sammy saves every piece of paper associated with Tasty Cookie. She kept copies of all of the business agreements she signed. She deposited all of the money Tasty Cookie earned in the companys bank account and retained copies of every deposit slip. Sammy also paid every company bill with a cheque and saved all of the related documents.

Assessment Tasks:

Answer all three questions below.

1. Assume Sammy wants to prepare Tasty Cookies 31 March balance sheet and Marchs income statement according to AASB. Describe to Sammy, in your own words, how she should organize the information about Tasty Cookies March transactions so that she can prepare a balance sheet and an income statement and keep her promise to her parents. (10 Marks)

2. After a week, Sammy still struggling with all the statements. She has come to you for help (with her parents permission). She says, list five stakeholders of accounting information and briefly describe the information requirements for each in assisting decision-marking. Prepare a written response to Sammys request. (10 Marks)

3. After a year later, Sammy saved some money from her Tasty Cookie business. She has $3800 to invest in the Australian Securities Exchange. But Sammy is confused about the basic business structures and she asked your help. Please define four types of business structure and list two key advantages and two key disadvantages of each.