Case 1-2 Kim Fuller

CASE 1-2 KIM FULLER* – BOTTLE GRINDING COMPANY Question 1 Accounting informationNon-Accounting Information 1) Used truck1) Grind machine workers 2) Truck drive2) Accountant assistances – Zimmer 3) Trailers$ 65,0003) Contracts with bottling companies 4) Grinding machine4) Truck Driver 5) Personnel computer5) Accounting Software Package 6) Warehouse$ 162,000 7) Sibling’s Investment$ 90,000 8) Mortgage loan$ 112,000 9) Filler’s Savings$ 75,000 Question 2 AssetsLiabilities Cash* $ 50,000Mortgage*$ 112,000 Equipment$ 65,000 Warehouse$ 162,000Owner’s Equity Paid-in Capital* $ 165,000 277,000$ 277,000 Note: Cash* = Fuller’s Saving + Sibling’s Investment – Equipmnt Cost – Warehouse Depst = $75,000 + $90,000 – $65,000 – $50,000 = $ 50,000 Mortgage* = Warehouse cost – Warehouse Deposit = $ 162,000 – $ 50,000 = $ 112,000 Paid-in Capital = Fuller’s saving + Sibling’s Investment = $75,000 + $90,000 = $165,000 Question 3 Information required to do profit and loss are revenues, cash of sales, administrative expenses, operating expenses and taxation. Fuller should prepare income statement and cash flow statement to keep track of his business.The financial statements can be done quarterly since it’s a small business but as the business grows, Fuller should do it monthly basis or weekly basis to keep his business under control. Question 4 Fuller should keep track of his assets depreciation or appreciation value; indentify new assets purchased with estimated lifespan of the assets. Changes in liabilities such as interest rate, mortgage tenure, and progressive interest charged by the banks, assets which changes from mortgage to owner’s equity. For owner’s claim, he should know how much he could claim as his salary and capital/dividend payment to investors/shareholders.