Paul, a sole trader, wanted to improve hotdogs sales, so he hired a team of accounting students tofigure out how. The students tested every aspect of the hotdog - the temperature, the viscosity andthe sweetness. They wanted to make the perfect Paul's hotdog. If they could create the best hotdogon the market, sales would certainly rise. Hotdogs are currently sold for N$10.00 per hotdog.Paul heard from his daughter that you are currently studying at Namibia University of Science andTechnology (NUST) and you are registered at NUST doing introduction to financial accounting. Heapproached you to help him with determining some operation costs of his business.He provided you with the following information of his business operational costs:Rental: N$6 500 per month• Cleaning and other miscellaneous supplies: N$1 300 per month• Equipment: Industrial Micro wave ovens: N$936 x 10 ovens = N$9 360•Equipment: Industrial Refrigerator/freezer: N$6 240• Countertops: N$15 600•Dancing fees paid by his wife: N$2 000 per month• Tables and benches for customers to sit outside: N$1 400 per bench-set x 10 = N$15 000••••.Water and electricity: N$2 500 per month.Marketing and advertising N$1 000 per monthTwo part-time employees: with each receiving a monthly salary of N$5 500 per month(including taxes and benefits)Depreciation of equipment: N$5 000 per yearBank loan: N$20 000 from Bank WindhoekGolf course fees paid from business bank account: N$5 000●• Prepaid income: N$1 500 from WHK kids conferenceBank loan charges N$200 per monthSale of hotdogs: N$50 000 per month. REQUIRED:(a)(b)(c)(d)(e)(f)Which of the above costs are not business operational costsIdentify the expenses in Paul's business that constitute business operational cash."Dancing fees paid by his wife: N$2 000 per month."You informed Paul that this is not allowed to be treated as a business transaction.Which accounting rule/concept will be violated if you record the transaction?Name the assets mentioned in Paul's business.What are the liabilities stated in Paul's business.Which of these business operational costs is an example of drawingsWho exactly are the "six users of Paul's financial statements"? What informationdo they need?

The sub-parts which you have asked to solve is the seven sub-parts but as per our protocol only…

(a) (b) (c) Which of the above costs are not business operational costs Identify the expenses in Paul's business that constitute business operational cash. "Dancing fees paid by his wife: N$2 000 per month." You informed Paul that this is not allowed to be treated as a business transaction. Which accounting rule/concept will be violated if you record the transaction?

(a) (b) (c) Which of the above costs are not business operational costs Identify the expenses in Paul's business that constitute business operational cash. "Dancing fees paid by his wife: N$2 000 per month." You informed Paul that this is not allowed to be treated as a business transaction. Which accounting rule/concept will be violated if you record the transaction?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 10E

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