Question

Clive Calmer offers accounting services to the local small business owners! He has set up a sole proprietorship business named CC Accounting. Clive has collected the following information relating to his business activities at the end of the financial year:

Office supplies                                        $1,500

Office supplies expense                     840

Telephone expense                              255

Motor vehicle expense                      330

Accounts receivable                           1,500

Bank loan                                                  7,500

Accounts payable                                 1,080

Cash at bank                                            8,445

Computer equipment                       8,250

Advertising expense                            510

Accounting service income            9,750

The following information was also disclosed from examining Clive’s bank statement:

Accounting service income receipts           $8,250

Initial contribution by Clive                            3,300

Bank loan received                                                9,000

Payments to suppliers                                         2,355

Repayment of loan                                                1,500

Computer equipment purchase                    8,250

REQUIRED:

1. Without preparing formal financial statements, calculate the following: (6 Marks)

1. Profit/loss for the year
2. Total assets at the end of the year
3. Total liabilities at the end of the year
4. Clive Calmer’s capital balance at the end of the year
5. Net cash inflow/outflow for the year

Answer 1