ciety who are suffering due to lack of food due to distorted trade in the country. After a lot of brainstorming and discussion, they decided to start the flour mill in the capital, which will be led by female and will support the female owned bakery business in the country. The following is the summary of the capital required to start their business an extract from their business plan that includes the NPV, IRR and payback period:
For following transactions Prepare the adjusted trail balance.
Natasha and Saher are living in Kabul as the humanitarian crisis looming in the country and the situation seems to be catastrophic due to a number of factors in the country’s poor economic condition including distorted trade in the country. They’ve decided to start up a small scale business which shall be financially sustainable and help people in the society who are suffering due to lack of food due to distorted trade in the country. After a lot of brainstorming and discussion, they decided to start the flour mill in the capital, which will be led by female and will support the female owned bakery business in the country. The following is the summary of the capital required to start their business an extract from their business plan that includes the
Machinery (plant) and its setup cost: $65,000
Space with 10,000 square feet to rent.
Their business model is to purchase wheat from the farmer and make flour in their plant (mill).
Natasha and Saher used their savings as the startup capital -contributed equally: $28,000
A friend also promised to invest in the business: $40,000
A local bank was impressed by their business plan and agree to lend money: $18,000
The local bank has demanded the title of the machinery in return as collateral.
The local bank agreed with 8% interest rate due on monthly basis.
They secured the financing and started their business in March 2022, and the following is the summary of the transactions:
On March 01, 2022 they opened a bank account with their business name i.e. ROZGAR Inc. after they registered their business, and deposited the sum of $28,000 as their capital invested in the business.
Their friend transferred a sum of $40,000 to the ROZGAR Inc. bank account as invested capital.
On March 10, 2022, they purchased their machinery(plant) and the cost to ship and install the machinery was $65,000 with useful life of 20 years and $5,000 scape value and they are using
On March 10, 2022, they signed the loan agreement with the local bank and received the sum of $18,000 in their bank account.
On March 11, 2022 They rented a facility and paid $1200 for 6 months’ rents in advance, exchanged and paid in local currency.
They paid the wages of $3,600 to their 20 to their 20 employees and the amount is who are working in the plant on 15th day of the next month, which means on April 15, 2022.
They paid $1,500 for fuel to run the plant (mill) in the month of March 2022.
They also paid $750 in for the utilities and maintenance cost for the month of March 2022.
They purchased raw material (bags) and other essential and paid $3,800 in cash during the month of March 2022.
Purchased 1000 Tons of wheat from farmers each ton for $26 and paid $1 per ton for transportation cost in cash in the month of March 2022.
Sold 2000 bags of 0.5 ton each to the female bakery owners for $20 a subsidized rate to promote female chain of bakery in the month of March 2022.
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