Nala runs a business retailing toys and games. Every sale is for cash, whereas every purchase is made on credit.
She has supplied the following details.
At 31 August 2023: Inventory $6265; Cash at bank $992; Trade payables $4880; Capital $125000
For the year to 31 August 2023: Revenue $98420; Purchases $78130; Expenses $11325
Inventory on 1 September 2022 was recorded at $6175.
(a)[11]
Complete the table below.
(b)[3]
Explain why Nala should not be fully satisfied with the outcome.
(c)[5]
Advise Nala whether she should obtain a bank loan to expand the business. Justify your answer by providing two points for and two points against obtaining the bank loan to expand the business.
(d)[1]
State why Nala’s bank manager would want to see her financial statements if she applies for the loan.
Worked solution & mark scheme
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