Without bookkeeping

Write an email to Terry and Kerry stating whether you think they should continue to operate or drop the bookkeeping service. Within your email include reference to your calculations from above as well as any relevant qualitative factors that T&K should consider before deciding whether to continue or drop bookkeeping services.

Your email should be no longer than 300 words.

(4 marks)

1 DATA FOR TASK A: 2017 Profit and Loss Statement for T&K Solutions Taxation Total 4 Revenue 5 Less: Costs 6Partner Sala 7Professional Staff Costs 8Office Staff 9Client travel costs 10- IT Su 11 - Printing & Stationa 800,000 195,000 950,000 1,945,000 75,000 320,000 45,000 25,000 5,000 8,000 8,000 16,000 8,000 5,000 2,000 283,000 75,000 120,000 45,000 5,000 3,000 3,200 8,000 16,000 8,000 5,000 3,000 96,200 150,000 400,000 45,000 52,000 9,000 11,000 8,000 16,000 8,000 5,000 300,000 840,000 135,000 82,000 17,000 22,200 24,000 48,000 24,000 15,000 5,000 432,800 12 Advertisi 13 Rent 14 Utilities 15Depreciation 16 Bad debts Net Profit 246,000 18 ADDITIONALINFORMATION: Terry and Kerry are both paid a salary of $150k pa. Terry's salary is spread between Tax & Bookkeeping. Kerry's salary is charged to Advisory Partner Wages 19 Professional Staff are paid $80k per full-time equivelent (FTE). Tax has 4 professional staff, Advisory has 5 professional staff and Bookkeeping has 3 part time staff who each work 0.5 of a FTE. If bookeeping was to close, these staff would no longer be required. Professional Staff 20 The firm has 3 office support staff each paid $45k per year. Currently their costs are spread evenly between the 3 service units. It is expected that if bookkeeping was to close there would be no change to the su Client travel costs vary depending on the service and client needs Office Support Staff staff 22 Client Travel Costs IT support costs vary with the associated service unit. 23 IT support Printing & Stationary Printing and stationary costs vary depending on the client needs and service performed. Advertising costs are alloacted evenly across the firm. However, if bookkeeping was to close it is expected advertising costs would only reduce by 10% in total Rent and Utilities are currently spread evenly across the 3 service units. If bookkeeping was to close the additional floor space would be absorbed by the remaining services and there would be no savings in utilitity costs Depreciation relates to shared office equipment and is charged evenly across each service unit. If bookkeeping was to close all existi Bad debts relate specifically to clients within that service unit. Advertising 25 Rent & Utilities 26 Deprectiation ent would remain 28 Bad debts 29