sSam’s illustrates wonderfully:
• Small business accounting & the importance of accounting • Analysis of cases (organizing & filtering info) • Basic preparation of F/S • Differences between accrual and cash paradigm
Sam Black has just completed a busy week organizing and supervising the annual April Fool's Day chicken, hot dog, and beer barbecue sponsored by the students' society of his faculty as a combination public relations, fun, and fundraising activity The barbecue was a success. Sam had just returned from the bank, where he had deposited the proceeds of $2,810 and proudly announced that the bank balance now stood at $2,858, which represented "the most successful result of any barbecue." The following conversation took place between Sam Black and Herbert McAlister, the president of the students' society. "Congratulations on the successful barbecue, Sam," said McAlister. "Would you please transfer the $2,858 to the society's bank account tomorrow, so I can pay for the advance booking of the graduating class dance?"
"I can't transfer all of the money," said Black. "I still have two bills to pay ‑ $347 for the chicken and $630 for the material needed to build the barbecue. The chicken was all sold, but the barbecue should last for another two years. "And further," Black added, "10 of the 80 cases of beer that were delivered C.O.D. were not sold and are to be returned for a refund of $4.80 per case. And at the same time, the 65 cases of empties will be picked up, and the deposit of $0.60 a case will be returned. "I managed to sell the 24 dozen buns left over for $0.50 a dozen to Jill Rosen for a sorority party," continued Sam. "This was half the unit cost of the 120 dozen purchased, but at least they will be used. Jill didn't have the money with her and will pay me tomorrow."
Spurred on by Herbert's interest, Black said he had also purchased barbecue sauce, condiments, and charcoal for $78 cash. Although there was a little barbecue sauce left...
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