Question
You are required to examine the financial information of Dobi Cute and Bersih Laundry. By the end of the first year of operation, both owners
You are required to examine the financial information of Dobi Cute and Bersih Laundry. By the end of the first year of operation, both owners want to find whether their business is doing well. Neither business kept updated accounting records, and neither owner made any withdrawals. The companies throw together the following data on 31 December 2022:
Requirements: In order to obtain more information for evaluating their similar businesses, both owners inquired several questions: a) Which business has more assets? b) Which business owes more to creditors? c) Determine whether Dobi Cute or Bersih Laundry has more owners equity at the year-end. d) Which business brought in more revenue? e) Which business is more profitable? f) In your opinion, which business is doing financially better? Kindly show your workings / explain your reasons for each answer.
\begin{tabular}{|lr|} \hline Dobi Cute & \\ & \multicolumn{1}{c|}{ RM } \\ Total assets & 123,000 \\ Owner's contribution & 80,000 \\ Total revenues & 135,000 \\ Total expenses & 95,000 \\ \hline \end{tabular} \begin{tabular}{|lr|} \hline Bersih Laundry & \\ & \multicolumn{1}{r|}{ RM } \\ Total liabilities & 110,000 \\ Owner's contribution & 60,000 \\ Total expenses & 44,000 \\ Net income & 9,000 \\ \hline \end{tabular}Step by Step Solution
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