Case 1-2 Kim Fuller

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CASE 1-2 KIM FULLER* - BOTTLE GRINDING COMPANY

Question 1

Accounting informationNon-Accounting Information

1) Used truck1) Grind machine workers
2) Truck drive2) Accountant assistances - Zimmer
3) Trailers$ 65,0003) Contracts with bottling companies 4) Grinding machine4) Truck Driver
5) Personnel computer5) Accounting Software Package
6) Warehouse$ 162,000
7) Sibling’s Investment$ 90,000
8) Mortgage loan$ 112,000
9) Filler’s Savings$ 75,000

Question 2

AssetsLiabilities
Cash* $ 50,000Mortgage*$ 112,000
Equipment$ 65,000
Warehouse$ 162,000Owner’s Equity
Paid-in Capital* $ 165,000
$ 277,000$ 277,000
Note:
Cash* = Fuller’s Saving + Sibling’s Investment – Equipmnt Cost – Warehouse Depst
= $75,000 + $90,000 - $65,000 - $50,000
= $ 50,000

Mortgage* = Warehouse cost – Warehouse Deposit
= $ 162,000 - $ 50,000
= $ 112,000

Paid-in Capital = Fuller’s saving + Sibling’s Investment
= $75,000 + $90,000 = $165,000

Question 3

Information required to do profit and loss are revenues, cash of sales, administrative expenses, operating expenses and taxation. Fuller should prepare income statement and cash flow statement to keep track of his business. The financial statements can be done quarterly since it’s a small business but as the business grows, Fuller should do it monthly basis or weekly basis to keep his business under control.

Question 4

Fuller should keep track of his assets depreciation or appreciation value; indentify new assets purchased with estimated lifespan of the assets. Changes in liabilities such as interest rate, mortgage tenure, and progressive interest charged by the banks, assets which changes from mortgage to owner’s equity. For owner’s claim, he should know how much he could claim as his salary and capital/dividend payment to investors/shareholders.
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