Outdoor World

You started a shop six months ago specialising in the sale of quality outdoor jackets. The following information gives the details behind your first six months of trading.

Sales

You have sold 200 jackets @ 200 per jacket. All these sales were for cash. Additionally, there was a bulk purchase, two months ago, of 40 jackets by the local university. You gave the university a 10 per cent discount and allowed them three months to pay.

Purchases

You have paid 160 for every jacket and currently have 30 jackets in your inventory. You still owe your suppliers the money for the last delivery of 10 jackets.

Expenses

Shop rental is 1,200 per annum, payable in advance.

The wage costs (all paid) were 6,000 for the six months.

You have spent 200 on petrol and other motor expenses.

Rates for the shop premises are 600 per annum, which you still have to pay.

Motor Vehicle

You bought, and paid for, a delivery van in the first month at a cost of 10,000. You expect it will last four years after which you hope to be able to sell it for 2,000.

Investment

You have invested 20,000 in the business and persuaded a friend to lend you 4,000, which is interest free and not repayable for five years.

Now answer the following:

Question text

SAQ 2.1

Required:

Your friend would like to see how his loan is doing and has asked for an income statement and a Statement of Financial Position for trading to date.