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Make sure to
incorporate this semester's rules for
tender (Cash Only, No Receivables, No Payables
allowed). Also, the tabular report presented below is
not suitable for presentation in Quiz #1, which specifically
asks for The Tables as they will be populated after startup
and a couple days' operation of your Enterprise.
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Here is a startup scenario for a simple Enterprise
such as you're encouraged to invent for this class.
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Bob Entre, a telephone guy who has been looking for an
opportunity to get into business with an enterprising fellow, Norman
Vestor, who has offered startup funding for a new Organization. They
decide on a name, 'Cable iZ Us,' and set to the details during July.
They work up a quick business plan, find good suppliers, and decide
that $15,000 would be a good investment. Bob goes out and lines up
some work for Harve' Benard to get started.
On August the 1st, N.Vestor gives $15,000 to be used as
startup capital (Order 91).
The next day, Bob goes out to get a truck and tools. He
finds a perfect truck at Trucks R Us (#92) and pays $7,500 cash for
this new asset.
Later that day, he goes to Cabling Stuff and gets $1,750
worth of tools to add to the new Org's assets (#94). He also verifies
that Harve' Benard is ready for his services the next day.
On the 3rd, he sets out to Harve' Benard with a stop by
Cabling Stuff (#95) to pick up 15,000 feet of Cat 5 wire, connectors,
and jumpers for the job. Since this is his first purchase of
materials, they require cash payment. He picks up Able Helper and they
start working, putting in three days to pull and connect the 60 drops.
On the 6th, he enters a sales order (#96), in which he bills
out the materials and labor at a nicely marked up rate, and puts
$6,984 on Harve' Benard's account receivable.
Also on the 6th, he enters purchase orders for Able Helper's
hourly rate (#97) and to compensate his own efforts (#98). They both
take cash and are happy to live in a state where taxes aren't
required.
On the 7th, he gets word of work needed by Anew Customer,
and finds that Able is available on the 9th to do this small job. On
the 9th, he stops back at Cabling Stuff and is please to find that
they let him take the goods on credit (#99). They do the work for Anew
Customer, which is billed on #100. Orders #101 & 101 are to
compensate Bob & Able.
The 'ledger details' for this activity would look like this:
OrderDate Id Entity Name GS Name Act LDet Amount
8/ 1/97 91 Norman Vestor Cash 100 1000 $15,000.00
8/ 1/97 91 Norman Vestor Equity 100 3000 ($15,000.00)
$0.00
8/ 2/97 92 Trucks R Us Truck 100 1030 $7,500.00
8/ 2/97 92 Trucks R Us Cash 100 1000 ($7,500.00)
8/ 2/97 94 Cabling Stuff, E Cabling Tools 100 1020 $1,750.00
8/ 2/97 94 Cabling Stuff, E Cash 100 1000 ($1,750.00)
$0.00
8/ 3/97 95 Cabling Stuff, E Connectors & Fitting 200 5000 $240.00
8/ 3/97 95 Cabling Stuff, E Cat 5 Jumpers, 10 ft 200 5000 $480.00
8/ 3/97 95 Cabling Stuff, E Cat 5 Cable, per foo 200 5000 $990.00
8/ 3/97 95 Cabling Stuff, E Cash 200 1000 ($1,710.00)
$0.00
8/ 6/97 96 Harve' Benard Accounts Receivable 200 1010 $6,984.00
8/ 6/97 96 Harve' Benard Cabling Services per 200 4010 ($2,784.00)
8/ 6/97 96 Harve' Benard Cat 5 Cable, per foo 200 4000 ($1,800.00)
8/ 6/97 96 Harve' Benard Connectors & Fitting 200 4000 ($960.00)
8/ 6/97 96 Harve' Benard Cat 5 Jumpers, 10 ft 200 4000 ($1,440.00)
8/ 6/97 97 Able Helper Cash 200 1000 ($456.00)
8/ 6/97 97 Able Helper Cabling Services per 200 5010 $456.00
8/ 6/97 98 Bob Entre Cabling Services per 200 5010 $600.00
8/ 6/97 98 Bob Entre Cash 200 1000 ($600.00)
$0.00
8/ 9/97 99 Cabling Stuff, E Cat 5 Cable, per foo 200 5000 $84.00
8/ 9/97 99 Cabling Stuff, E Connectors & Fitting 200 5000 $21.00
8/ 9/97 99 Cabling Stuff, E Cat 5 Jumpers, 10 ft 200 5000 $45.00
8/ 9/97 99 Cabling Stuff, E Accounts Payable 200 2000 ($150.00)
8/ 9/97 100 Anew Customer Cabling Services per 200 4010 ($1,120.00)
8/ 9/97 100 Anew Customer Cash 200 1000 $1,504.00
8/ 9/97 100 Anew Customer Cat 5 Jumpers, 10 ft 200 4000 ($150.00)
8/ 9/97 100 Anew Customer Cat 5 Cable, per foo 200 4000 ($144.00)
8/ 9/97 100 Anew Customer Connectors & Fitting 200 4000 ($90.00)
8/ 9/97 101 Able Helper Cabling Services per 200 5010 $180.00
8/ 9/97 101 Able Helper Cash 200 1000 ($180.00)
8/ 9/97 102 Bob Entre Cash 200 1000 ($200.00)
8/ 9/97 102 Bob Entre Cabling Services per 200 5010 $200.00
$0.00
If these are 'Journalized' and pumped along to
a Ledger Engine the resulting financial statements, without the
Activity Id, would look like
this:
FINANCIAL STATEMENTS FOR CABLE IZ US AS OF 8/9/97
BALANCE SHEET
1000 Cash 4,108.00
1010 Accounts Receivable 6,984.00
1020 Furniture & Eqt 1,750.00
1030 Vehicles 7,500.00
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Assets $20,342.002000 Accounts Payable 150.00
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Liabilities 150.00 3000 Stock 15,000.00
3999 Retained Earnings 5,192.00
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Equity $20,192.00
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Liabilities + Equity $20,342.00
INCOME & EXPENSE
4000 Sales of Goods 4,584.00
4010 Sales of Services 3,904.00
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Income $8,488.00 5000 Cost of Goods 1,860.00
5010 Cost of Services 1,436.00
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Expenses $3,296.00 (LOSS) PROFIT $5,192.00
This isn't bad for a few days of operation, and when Harve'
Benard pays their bill N. Vestor ought to be pleased with the tidy
profit racked up from two jobs. After he and Bob see some more activity
like this, they'll be encouraged to rent office space, hire somebody to
answer the phone, and do the other things expected as an Organization
matures.
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