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ular about the quality of the s the meat and/or vegetable quality of the food served. ministrative costs, and depr- 2015 and AED75,000 in 20 t a rough estimate of overa lary, but shared in the profi

ular about the quality of the s the meat and/or vegetable quality of the food served. ministrative costs, and depr- 2015 and AED75,000 in 20 t a rough estimate of overa lary, but shared in the profi

FINANCIAL ACCOUNTING
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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FINANCIALS FOR 2015 Yalla Momos, which Goel had started with his small savings in 2012, generated AED504,000 in total sales and AED156,240 in revenue in 2015. The average meal was priced at AED20, including food and beverages; beverages accounted for approximately 20 per cent of revenue. Goel was particular about the quality of the raw materials used, which included the white flour dough as well as the meat and/or vegetable and cheese fillings. No compromise was acceptable in terms of the quality of the food served. Apart from raw materials, other expenses included rent and utilities, administrative costs, and depreciation. The rent for all three locations was AED68,000 in 2015 and AED75,000 in 2016. Goel did not maintain very detailed financial records, but kept a rough estimate of overall expenses (see Exhibit 1). The owners did not pay themselves a salary, but shared in the profits of the business. EXHIBIT 1: YALLA MOMOS INCOME STATEMENT FOR THE YEAR ENDING 2015 (IN AED) Net Revenue 504,000 Expenses Cost of food sales Rent Salaries Administrative costs Depreciation 151,200 68,000 54,000 23,000 30,200 13,000 15,800 Utilities Miscellaneous expenses Advertising costs Interest Net Profit 13,000 135,800 -Q1: Calculate the 2015 BEP and Margin of safety (MOS) in quantity and monetary terms.
Transcribed Image Text:FINANCIALS FOR 2015 Yalla Momos, which Goel had started with his small savings in 2012, generated AED504,000 in total sales and AED156,240 in revenue in 2015. The average meal was priced at AED20, including food and beverages; beverages accounted for approximately 20 per cent of revenue. Goel was particular about the quality of the raw materials used, which included the white flour dough as well as the meat and/or vegetable and cheese fillings. No compromise was acceptable in terms of the quality of the food served. Apart from raw materials, other expenses included rent and utilities, administrative costs, and depreciation. The rent for all three locations was AED68,000 in 2015 and AED75,000 in 2016. Goel did not maintain very detailed financial records, but kept a rough estimate of overall expenses (see Exhibit 1). The owners did not pay themselves a salary, but shared in the profits of the business. EXHIBIT 1: YALLA MOMOS INCOME STATEMENT FOR THE YEAR ENDING 2015 (IN AED) Net Revenue 504,000 Expenses Cost of food sales Rent Salaries Administrative costs Depreciation 151,200 68,000 54,000 23,000 30,200 13,000 15,800 Utilities Miscellaneous expenses Advertising costs Interest Net Profit 13,000 135,800 -Q1: Calculate the 2015 BEP and Margin of safety (MOS) in quantity and monetary terms.
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