Question
Sara, an entrepreneur is restarting her bakery business after an economic wave forcing her to close down previous business. The business left her with RM
Sara, an entrepreneur is restarting her bakery business after an economic wave forcing her to close down previous business. The business left her with RM 70 000 of debt under his personal loan, car, van, baking machine, caf fitting and cutleries worth RM 45 000, RM 90 000, RM 14 000, RM 20 000 and RM 8 000 respectively. The van is expected to be useful for another 7 years with the annual depreciation of RM 12 000. She sold the car at the fair value to fund his new business. On top of that, she applied loan of RM 50 000 as additional capital. The business is operating in a rented premise with RM 45 000 of annual rental. The business is expected to last for 3 years with current financial position.
1. State the type of business by Sara with reasons. 2. Calculate the following: a. Total assets of new business b. Total capital c. Total liabilities 3. Generate the accounting equation based on your answer in (2). 4. Explain at least FOUR (4) possible sources of capital for Sara. 5. Suggest on the measures to be taken by Sara to make sure that the business can last longer. 6. Calculate the salvage value and depreciation rate of the van.
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