MNE3701
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 8 May 2025
QUESTION 1
The three primary financial statements that need to be prepared are the Income Statement,
Balance Sheet, and Cash Flow Statement.
1. INCOME STATEMENT (PROFIT AND LOSS STATEMENT)
The Income Statement shows the business's revenues and expenses over a specific
period, resulting in a net profit or loss.
Practical Example:
Suppose I own a small bakery called Sweet Treats Bakery.
Revenue: R150,000 (sales of cakes and pastries)
Expenses:
o Rent: R15,000
o Salaries: R50,000
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
The three primary financial statements that need to be prepared are the Income
Statement, Balance Sheet, and Cash Flow Statement.
1. INCOME STATEMENT (PROFIT AND LOSS STATEMENT)
The Income Statement shows the business's revenues and expenses over a
specific period, resulting in a net profit or loss.
Practical Example:
Suppose I own a small bakery called Sweet Treats Bakery.
Revenue: R150,000 (sales of cakes and pastries)
Expenses:
o Rent: R15,000
o Salaries: R50,000
o Ingredients and supplies: R30,000
o Utilities: R5,000
o Marketing: R10,000
Income Statement Example:
Income Statement for Sweet Treats Bakery Amount (R)
Revenue 150,000
Less: Expenses
- Rent (15,000)
- Salaries (50,000)
- Ingredients and supplies (30,000)
- Utilities (5,000)
, For additional support +27 81 278 3372
- Marketing (10,000)
Net Profit 40,000
2. BALANCE SHEET
The Balance Sheet shows the business's assets, liabilities, and owner’s equity at a
specific point in time.
Practical Example:
Using Sweet Treats Bakery:
Assets:
o Cash: R30,000
o Equipment (baking ovens, counters): R70,000
o Inventory (flour, sugar, ingredients): R10,000
Liabilities:
o Loan from the bank: R40,000
Owner’s Equity:
o Owner’s investment: R70,000
Balance Sheet Example:
Balance Sheet for Sweet Treats Bakery Amount (R)
Assets
Cash 30,000
Equipment 70,000
Inventory 10,000
Total Assets 110,000
Liabilities and Owner’s Equity
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 8 May 2025
QUESTION 1
The three primary financial statements that need to be prepared are the Income Statement,
Balance Sheet, and Cash Flow Statement.
1. INCOME STATEMENT (PROFIT AND LOSS STATEMENT)
The Income Statement shows the business's revenues and expenses over a specific
period, resulting in a net profit or loss.
Practical Example:
Suppose I own a small bakery called Sweet Treats Bakery.
Revenue: R150,000 (sales of cakes and pastries)
Expenses:
o Rent: R15,000
o Salaries: R50,000
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
The three primary financial statements that need to be prepared are the Income
Statement, Balance Sheet, and Cash Flow Statement.
1. INCOME STATEMENT (PROFIT AND LOSS STATEMENT)
The Income Statement shows the business's revenues and expenses over a
specific period, resulting in a net profit or loss.
Practical Example:
Suppose I own a small bakery called Sweet Treats Bakery.
Revenue: R150,000 (sales of cakes and pastries)
Expenses:
o Rent: R15,000
o Salaries: R50,000
o Ingredients and supplies: R30,000
o Utilities: R5,000
o Marketing: R10,000
Income Statement Example:
Income Statement for Sweet Treats Bakery Amount (R)
Revenue 150,000
Less: Expenses
- Rent (15,000)
- Salaries (50,000)
- Ingredients and supplies (30,000)
- Utilities (5,000)
, For additional support +27 81 278 3372
- Marketing (10,000)
Net Profit 40,000
2. BALANCE SHEET
The Balance Sheet shows the business's assets, liabilities, and owner’s equity at a
specific point in time.
Practical Example:
Using Sweet Treats Bakery:
Assets:
o Cash: R30,000
o Equipment (baking ovens, counters): R70,000
o Inventory (flour, sugar, ingredients): R10,000
Liabilities:
o Loan from the bank: R40,000
Owner’s Equity:
o Owner’s investment: R70,000
Balance Sheet Example:
Balance Sheet for Sweet Treats Bakery Amount (R)
Assets
Cash 30,000
Equipment 70,000
Inventory 10,000
Total Assets 110,000
Liabilities and Owner’s Equity
