REQUIREMENT Read thoroughly the given scenario and answer the question. Hans is a serial entrepreneur. He loves to start up a new business, but he gets bored after about two months and moves on to something new. Hans was born in Denmark, but lives in Galveston, GA Hans' latest venture is buying used BMW cars in Germany, and driving them to Moscow, Prague, Warsaw and Budapest to sell at a profit. He started this business buy depositing $50,000 in a bank account in Frankfurt. The results of the first month's trading have been as follow (all in $): Model Selling price Profit (loss) Reference 3 Series Saloon 3 Series Convertible 5 Series Saloon 7 Series Estate 7 Series AMG Total 30,000 50,000 25,000 30,000 50,000 185,000 Purchase Price 42,000 40,000 25,000 29,000 20,000 156,000 (12,000) 10,000 0 1,000 30,000 29.000 1 2 3 4 5 Hans incurred the following expenses (all in $) during the first month: Insurance Transport costs Travel and hotel expenses Commission Entertaining Total $5,000 10,000 2,000 5,000 5,000 27,000 All the transactions were undertaken in US$ and they were all cash sales and cash purchases. However, the bank has notified Hans of its intention to charge $1,000 interest and currency charges for the first month. This should be included as an expense and a creditor. Your Task: (1) Using the spreadsheet format show both sides of each of the transactions above (see pro forma in the appendix). (17 marks) (2) Prepare a trial balance at the end of the first month (see pro forma in the appendix). (9 marks) (3) Write a paragraph comparing the profit earned to the amount of capital invested. (10 marks) (4) If Hans asks your opinion about investing $800,000 in a new computer system (for another new business venture), what would be your advice? Give a comprehensive and professional answer using the accounting framework, ie impact on the components of the accounting equation. (14 marks) (Total 50 marks) Hans Spreadsheet (Pro Forma) Remark Ref. no. Income Expenditure Assets Liabilities Owner's Equity Capital Sales Purchase Expenses Cash Accounts Payable Hans Trial Balance DR (S) CR (S)