Session 3 Case studies and Solutions Nursery Management

Session 3 Case studies and Solutions Nursery Management Understanding and Managing Finance

Mc. Laney and Atrill Exercise 2. 1 and 2. 1 p 54 Wrapping Paper Accounts (End of Day 3) Cash Flow Profit and Loss Balance Sheet Cash £ 49 Stock Total Wealth £ 28 £ 77 Op. Bal. £ 63 Sales Sale £ 32 £ 95 -£ 46 £ 49 Cost of goods -£ 23 Profit. £ 9 Cash paid C. Bal. £ 32 NB this is just the asset side of the Balance Sheet

Mc. Laney and Atrill Exercise 2. 1 and 2. 1 p 54 § § On day 4, Paul purchases stock for £ 53 in cash. During the day he sells stock that cost £ 33 for £ 47. Construct a cash flow statement, profit and loss account and a balance sheet. for the fourth day.

Mc. Laney and Atrill Exercise 2. 1 and 2. 1 p 54 Wrapping Paper day 3 Cash Flow Profit and Loss Balance Sheet Cash £ 43 Stock Total Wealth £ 48 £ 91 Op. Bal. £ 49 Sales Sale £ 47 £ 96 -£ 53 £ 43 Cost of goods -£ 33 Profit. £ 14 Cash paid C. Bal. £ 47 Can you now account for the ‘Total Wealth ‘figure?

Mc. Laney and Atrill Exercise 2. 1 and 2. 1 p 54 - Solution Wrapping Paper - Total Wealth Cash on Day 1 £ 40 Balance Sheet Profit Day 1 £ 15 Cash £ 43 Profit Day 2 Profit Day 3 Profit Day 4 Total £ 13 £ 9 £ 14 £ 91 Stock Total Wealth £ 48 £ 91 Can you now create the right hand side to the Balance sheet?

Mc. Laney and Atrill Exercise 2. 1 and 2. 1 p 54 - Solution Wrapping Paper Balance Sheet ASSETS CLAIMS Cash £ 43 Owner’s Capital £ 40 Stock Total £ 48 £ 91 Retained Profits Total £ 51 £ 91