Charlie Driver has $30,000 saved and has decided to attend college, takingcourses in marketing and retailing. To help pay his tuition and livingexpenses, he contracted with a mobile catering company as an independentdriver. Charlie will run his mobile catering business on a cash basis; he hasnamed his business Charlie's Convenient Catering, or the 3C Company forshort. He opened a company bank account with $30,000. He bought a used,fully equipped mobilecatering truck for $26,000, and operated from January 4 to December 31,2020. At the end of the year, Charlie had $26,010 in the bank and $148 in acash drawer. Invoices show he purchased food, beverages, and suppliesinventories for $45,296; ending inventory remaining on the truck was $350.His invoices for truck operating expenses total $3,828 paid, and he has oneunpaid truck repair invoice for $254. Charlie withdrew $2,000 a month forpersonal expenses. The truck has a five-year life and no residual value, andstraight-line depreciation is to be used.Charlie asks you to help him put together his business information andreconstruct his cash sales. He recorded his daily cash sales in a notebookthat cannot be found.1. Calculate 3C Company's revenue2. Prepare an accrual income statement.3. Prepare a balance sheet.4. Charlie is concerned that he has less cash now than he had when hestarted. Explain why

As per the Honor code of Bartleby we are bound to given the answer of first three sub part only.…

Answered: Charlie Driver has $30,000 saved and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hank has a $30,000.00 GIC which is locked in for the next 2 months at which time he can access his money. Today he was offered the opportunity to purchase his friends antique Harley Davidson motorcycle for $20,000.00 providing he can pay for it in the next few days or his friends is going to sell it on Kjiji. Hank really wants the motorcycle and has approached Everyday Bank about a loan noting that he can only afford a very small payment. What product would best meet Hank’s needs? a. A personal line of credit for $20,000.00 b. An interest only demand koan for $20,000.00 c. A fixed repayment Loan for $20,000.000 with a variable interest rate and fixed monthly payments. d. An Everyday Bank MasterCard with a limit of $20,000.00
John was a high school teacher earning $ 80,000 per year. He quit his job to start his own business in pizza catering. In order to learn how to run the pizza catering business, John enrolled in a TAFE to acquire catering skills. John’s course was for 3 months. John had to pay $2,000 as tuition for the 3 months. After the training, John withdrew $110,000 from his savings account. He had been earning 5 percent interest per year for this account. He also borrowed $50,000.00 from his friend whom he pays 6 percent interest per year. Further, to start the business John used his own premises. He was receiving $12,000 from rent per year. Finally, to start the business John uses $50,000 he had been given by his father to go on holiday to USA. John’s first year of business can be summarised as follows: Item Amount $ Revenue- Pizza Section 400,000 Revenue- Beverages Section 190,000 2 Cashiers (wages per worker) 55,000 Pizza ingredients 50,000 Manager 75,000…
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A new company down the street is thinking about buying a radio system. Their purchasing agent, Harry, is my next-door neighbor. Harry asks me if he can "borrow" a MR-808BC from me to test out. I don't like to do that, but Harry offers me $1,200 cash to use the Broadcaster for two months. I take his $1,200 cash and loan him the MR-808BC. I deposit the $1,200 in the bank. I have been interested in the possibility of going into the rental business. This is a good opportunity to see how it will work and what results it may produce. ***For this transaction, you may do journal entries to accomplish all of the accounting necessary. Be mindful of all of the accounts impacted by this transaction. What is the JE's for the scenario above? Or is this ignored for business purposes?
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QUESTION 23 Bella Vista Service Co. is a computer service center. For the month of May, Bella Vista Service Co. had the following operating statistics: Sales $450,000 Net profit after taxes 8,000 Total assets 500,000 Stockholder’s equity 200,000 Cost of capital 6% Based on the above information, Bella Vista Service Co. has a: A. residual income of negative $22,000. B. residual income of negative $2,000. C. return on investment of 4%. D. return on investment of 6%. E. return on investment of 5.6%.
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You have determined in your mind that you would like to have a business of your own, although your father runs a family restaurant in your local city. You have therefore, decided to have a medium size snack and cocktails bar which will accommodate the cruise ship passengers who visit your city. You plan to keep the business for five years after which you will sell it off to your brother John for $2, 000,000 and go off to do your Master's Degree in the UK. Though you will be occupying the establishment from your grandmother for free, you have decided that you need to make some improvements to the property which will cost you $1,500,000. Additionally, you will spend $275,000 in bar stools, tables and decorations. If this space had been leased out, it would have fetched a lease rental of $75,000 per year. You will depreciate the assets over 7 years using MACRS. You have determined that you would need an average cash balance of $15,000 and inventory of $20,000 while Accounts payable should…

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