,MNE3701 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 - DUE 8 May 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
QUESTION 1
Demonstrate how you would go about constructing financial
statements of your smallbusiness with reference to practical examples.
(10)
Constructing financial statements for a small business involves a
systematic process of recording, summarizing, and presenting financial
data to show the financial performance and position of the business.
Here’s a step-by-step demonstration with practical examples. The three
core financial statements are:
1. Income Statement (Profit and Loss Statement)
2. Statement of Financial Position (Balance Sheet)
3. Cash Flow Statement
for instance, a small coffee shop called “Bean Scene Café”.
1. Gathering Financial Information
Before you can construct any financial statement, gather the following:
Receipts and sales invoices (for revenue)
Bank statements
Supplier invoices and expense records
Asset register
Loan agreements
Payroll records
, 2. Constructing the Income Statement (Profit and Loss)
This shows profitability over a specific period (usually monthly,
quarterly, or yearly).
Example: Bean Scene Café (for the year ended 28 Feb 2025)
Income Statement Amount (R)
Revenue (sales) 750,000
Less: Cost of Goods Sold (COGS) (250,000)
Gross Profit 500,000
Operating Expenses:
- Rent (100,000)
- Salaries (180,000)
- Utilities (20,000)
- Marketing (15,000)
- Supplies (10,000)
Total Operating Expenses (325,000)
Net Profit Before Tax 175,000
Less: Income Tax (28%) (49,000)
Net Profit After Tax 126,000
3. Constructing the Statement of Financial Position (Balance Sheet)
This shows the financial position at a specific point in time.
Example: As at 28 Feb 2025
Assets Amount (R)
Non-Current Assets:
- Equipment (Coffee machines, etc.) 120,000
- Furniture and Fixtures 80,000
Less: Accumulated Depreciation (30,000)
Semester 1 2025 - DUE 8 May 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
QUESTION 1
Demonstrate how you would go about constructing financial
statements of your smallbusiness with reference to practical examples.
(10)
Constructing financial statements for a small business involves a
systematic process of recording, summarizing, and presenting financial
data to show the financial performance and position of the business.
Here’s a step-by-step demonstration with practical examples. The three
core financial statements are:
1. Income Statement (Profit and Loss Statement)
2. Statement of Financial Position (Balance Sheet)
3. Cash Flow Statement
for instance, a small coffee shop called “Bean Scene Café”.
1. Gathering Financial Information
Before you can construct any financial statement, gather the following:
Receipts and sales invoices (for revenue)
Bank statements
Supplier invoices and expense records
Asset register
Loan agreements
Payroll records
, 2. Constructing the Income Statement (Profit and Loss)
This shows profitability over a specific period (usually monthly,
quarterly, or yearly).
Example: Bean Scene Café (for the year ended 28 Feb 2025)
Income Statement Amount (R)
Revenue (sales) 750,000
Less: Cost of Goods Sold (COGS) (250,000)
Gross Profit 500,000
Operating Expenses:
- Rent (100,000)
- Salaries (180,000)
- Utilities (20,000)
- Marketing (15,000)
- Supplies (10,000)
Total Operating Expenses (325,000)
Net Profit Before Tax 175,000
Less: Income Tax (28%) (49,000)
Net Profit After Tax 126,000
3. Constructing the Statement of Financial Position (Balance Sheet)
This shows the financial position at a specific point in time.
Example: As at 28 Feb 2025
Assets Amount (R)
Non-Current Assets:
- Equipment (Coffee machines, etc.) 120,000
- Furniture and Fixtures 80,000
Less: Accumulated Depreciation (30,000)
