Reference no: EM132554112

Balqis's Burger Stalls

The Background: In the upcoming semester break holiday, Business School student Balqis wanted to make some cash the old-fashioned way: by getting someone else to earn it for her. Who better than her two younger brothers Syafiq and Kyle? After all, they were eager and would work for some pocket money. Who knows, maybe her parents would even pay to engage the boys in some intellectual activity. Balqis planning to register the business as sole proprietorship with Registration of Company (SSM).

• Planning for Burger Stalls: Balqis decided to withdraw RM5,000 from her savings account to start two burger stalls, one each for Syafiq and Kyle. She spent RM1,200 each on two new stainless steel burger stall, which had about six years useful life. She bought packages of raw materials for burger such as buns, margarine, mayonnaise, cheese, ground white pepper, chilli sauce, worcestershire sauce, egg, beef and chicken patty. Balqis also spent two high-quality cooking utensils at a cost of RM582 total and two units of gas stove at a cost of RM70 each. The cooking utensils should last two years and for gas stove should last five year. She also figured she would have to pay them RM50 each day they decided to work. Since each stall would be within walking distance of their home, they could get ice from the freezer as needed, and retrieve water from the garden hose out front.

• Syafiq's Set-Up: She set Syafiq's burger stall up first and provided him with raw material to prepare 900 units of burger (cost of RM990 total) and she gave him a stainless steel burger stall, cooking utensils, gas stove and chair. He also got RM100 in cash to use for change. Walking away, she was confident that her RM2,651 investment would pay off. As soon as Balqis rounded the corner, Syafiq called for their mommy and asked to borrow RM120 to buy a table and chair (which had about four years useful life) for customer to be sit while waiting for their order to be ready. Syafiq is now officially ready for Burger stall.

• Kyle.'s Set-Up: Balqis next turned her sights to Kyle's burger stall, which would be around the corner. Since he was younger, she only provided him with raw material to prepare 600 units of burger (costing RM660 total). She provided him with stainless steel burger stall, cooking utensils, gas stove and chair. She then gave him only RM50 to use for change because she did not trust him with the cash. She was glad she'd only got RM2,271 invested into Kyle's burger stall as she did not think he was going to work very hard. Balqis hid the remaining money under her mattress just in case it was needed for a good reason in the first couple weeks of the business, then put on her bathing suit. As she headed to the beach with her friends, Balqis could not help but wonder if she should have left her hard-earned money in the bank, earning 5% interest guaranteed.

Question 1. Based on the information above, you are required to prepare "set-up" statement of financial position for:

a) Syafiq and

b) Kyle

Syafiq's Business: Syafiq worked a total of 25 days but had not been paid yet as he did not want to take the money until Balqis gave him her consent. He sold 850 units of burger at a price of RM5 each and provided her with detailed charts and graphs showing daily and hourly sales. He received cash from 840 customers, and another ten customers said they would pay by the end of the following week. He had a list of everyone who owed money and how much they owed, where they lived, and a signed IOU from each person. Balqis paid mommy back RM90 out of what was owed to her for the table and chair. Balqis took a total of RM60 from Syafiq's cash on hand to buy some sunscreen for herself. The table and chair appeared to be in great shape; it seemed like it could be used for many more years. She gave Syafiq a pat on the back and told him he may be up for a raise for next year - something like a cost of living adjustment plus 1%.

Question 2. Based on the information above, you are required to prepare Syafiq statement of comprehensive income and statement of financial position.

Kyle's Business: The first week of the semester break holiday, Balqis got worried that she had too much money tied up into her younger brother's stall. So, she borrowed RM150 from their dad and said she'd pay him back at the end of the semester break holiday, plus an additional RM15 of interest. Kyle said that he had worked a total of 20 days and already taken the RM1,000 that he said he had earned. He claimed to have sold 590 units of burger, and there was a total of RM1,920 cash on hand at semester break holiday's end, crumpled up in a can Kyle handed to her. Kyle swore that he had sold RM2,950 worth of burger, and he also remembered selling burger to a group of five teenagers who said they'd drop by at some point to pay up. He had no idea who they were but thought one of them looked familiar. There was no raw material for burger was in sight. Balqis took RM80 from Kyle's stall to buy some pizza for herself and her friends.

Question 3. Based on the information above, you are required to prepare Kyle statement of comprehensive income and statement of financial position.