Question

Jane decided to embark on a business venture. She finds that the artworks of native Sabahans unique and she decided to buy some from a local supplier and sell them in Singapore. She began with an initial cash amount of S$1,500. On week 1 of her business venture, she bought artworks worth a total of $1,400 at which she sold a quarter of them for S$550. She received comments from many of her would-be customers that the price she charged was too high. With this in mind, Jane decided to lower the price of the artworks. On the second week, she lowered the price and sold 2/3 of the remaining artworks for a total of S$900. Encouraged, Jane then decided to try to expand her reach to potential customers – she decided to offer delivery services. On week 3, she purchased an LTA-compliant e-scooter for S$399 with S$200 borrowed, interest-free, from her parent, which she promises to repay in 2 weeks. She also bought more artworks from the supplier at an amount of S$700. Jane sold all her artworks for a total of S$1,500. She also spent $100 in electricity costs for charging the e-scooter. On week 4, she decided that she no longer needed the e-scooter and sold it on the same day for a price of S$200.

Based on the above scenario, develop the income statement and the balance sheet describing Jane’s business venture using Microsoft Excel.
Hint: The initial cash amount should be modeled in Week 0. You will be evaluated based on the correctness of your answer and the tidiness of the layout of your statements.

(40 MARKS)

Answer 1

Income Statement for the period ended.... 2.950 2,950 2 100 100 2,200 Revenue from Operations Other Income Total revenue - (1) Expenses Purchases of Artworks Change in inventories (Opening Less Closing) Electricity Expense Total expenses - (11) Earnings before interest, tax, depreciation and amortization (EBITDA) () - (11) Depreciation and amortization expense Finance costs Profit(loss) before exceptional items & tax Exceptional items Loss on sale of asset (net) [e-scooter] Profit/(loss) for the period 750 0 750 199 551 Balance Sheet as on..... 1,500 551 EQUITY AND LIABILITIES Owners' Funds Capital Current Period Profits Non Current Liabilities Long term Borrowings Current liabilities Short Term Borrowings Trade payables Other current liabilities TOTAL 2,051 ASSETS Non Current assets Property, Plant & Equipment Tangible assets Intangible Assets Intangible assets under development Long-term loans and advances Current assets Inventories Trade Receivables Cash and bank balances Short-term loans and advances Other Current Assets TOTAL 2.051 Notes: Initial amount of $1500 has been classified as Capital Introduced in the Business There is no inventory remaining at the end of 4 weeks, hence the change in Inwentonos is NI There was no Finance Cost involved as the amount borrowed was Interest Free The amount borrowed has been repaid by Sale Proceeds of the Electric Scooter All the Purchases of Artworks have been made by cash.