Requirements:

You are requested to provide Katie with detailed accounting advice that addresses:

$1.$ An analysis of the external factors affecting the business, $($such as shop location, competitive environment, manufacturing$/$ supplier of toys...$).$ Changes that the company could make to business operations to improve performance and regain market share.

$2.$ An analysis of Inventory management by referring to the inventory turnover with the information provided$)$ and suggested strategies for improving inventory management.

Assuming that the inventory turnover days of the industry average is $45$ days.

$3.$ An analysis of Receivable management by referring to the information provided $($Account Receivable Turnover$/$ Receivable aging schedule$/...)$ and suggested strategies for improving receivable management.

Assuming that the Receivable turnover days of the industry average is $30$ days.

Ratio formula provided:

$$ Inventory turnover ratio $=$ Cost of Goods Sold$/$ Average Inventory

$$ Inventory turnover days $($Days Inventory Outstanding$)=365/$ Inventory turnover ratio

$$ Account Receivable Turnover $=$ Net Credit Sales$/$ Average Account Receivable

$$ Receivable Turnover Days Average collection period$)=365/$ Account Receivable Turnover

$4.$ The company is planning to buy new equipment in Oct $2023$ for the manufacturing process.

Payment for equipment is $102,000.$ Freight cost and insurance to get the new equipment to the factory is $10,200.$ Installation cost on equipment is $5,650.$ Cost of safety rails and platforms surrounding equipment is $19,850.$ Assuming that the equipment will be acquired on May $1$st$,2023,$ with a useful life of $6$ years and a residual value of $54,600.$

Determining the annual depreciation expense under straight$-$line method. How the depreciation value of this equipment will be illustrated in the Financial Statement through its useful life?

$5.$ Katie has received an offer from an associate, Mr D$.$ Swain, to go into business as a private company, and purchase a newsagent together. This would mean selling her business. Explain to Katie how going into business with Mr D Swaine as a private company might impact their accounting concepts and future accounting reports $($such as Accounting entity$/$ Legal entity$/$ Duality....$),$ outlining the advantages and disadvantages of moving from a sole trader to a private company for Katie and give her advice in this situation.