Session 3Case studies and Solutions

Nursery ManagementUnderstanding and Managing Finance

McLaney and Atrill Exercise 2.1 and 2.1 p 54

Wrapping Paper Accounts (End of Day 3)

Cash Flow

Op. Bal. £63

Sale £32

£95

Cash paid -£46

C. Bal. £49

Profit and Loss

Sales £32

Cost of goods -£23

Profit . £9

Balance Sheet

Cash £49

Stock £28

Total Wealth £77

NB this is just the asset side of the Balance Sheet

NB this is just the asset side of the Balance Sheet

McLaney 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.

McLaney and Atrill Exercise 2.1 and 2.1 p 54

Wrapping Paper day 3

Cash Flow

Op. Bal. £49

Sale £47

£96

Cash paid -£53

C. Bal. £43

Profit and Loss

Sales £47

Cost of goods -£33

Profit . £14

Balance Sheet

Cash £43

Stock £48

Total Wealth £91

Can you now account for the ‘Total Wealth ‘figure?

Can you now account for the ‘Total Wealth ‘figure?

McLaney and Atrill Exercise 2.1 and 2.1 p 54 - Solution

Wrapping Paper - Total Wealth

Cash on Day 1 £40

Profit Day 1 £15

Profit Day 2 £13

Profit Day 3 £9

Profit Day 4 £14

Total £91

Balance Sheet

Cash £43

Stock £48

Total Wealth £91

Can you now create the right hand side to the Balance sheet?

Can you now create the right hand side to the Balance sheet?

McLaney and Atrill Exercise 2.1 and 2.1 p 54- Solution

Wrapping Paper Balance Sheet

CLAIMS

Owner’s Capital £40

Retained Profits £51

Total £91

ASSETS

Cash £43

Stock £48

Total £91