Entrepreneurship and Small Business Management (MNE3701)
Institution
University Of South Africa (Unisa)
Book
Small Business Management
MNE3701 Assignment 2 (DETAILED ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED Answers, guidelines, workings and references .................... QUESTION 1
• Demonstrate how you would go about constructing financial statements of your
small business with reference to practical examples. (30)
...
Entrepreneurship and Small Business Management (MNE3701)
All documents for this subject (44)
1
review
By: madubanyamm • 1 month ago
Seller
Follow
VarsityC
Reviews received
Content preview
MNE3701
Assignment 2 Semester 1 2024
Unique #:
Due Date: 30 April 2024
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1
Three important financial statements can be used for decision making:
• a statement of profit and loss and other comprehensive income,
• a statement of financial position and
• a statement of cash flows.
STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
The income statement shows the profit or loss of a business over time. The
statement of profit and loss and other comprehensive income provides information
on the following broad topics:
• revenue
• cost of goods sold
• operating expenses
• financing costs
• payment of taxes
Example
Creating a Statement of Profit and Loss and Other Comprehensive Income for your
small business, MNE3701 Pvt Ltd, involves several steps as illustrated below.
Step 1: Determine the Reporting Period
Decide on the timeframe for which you're reporting. This is usually done annually,
semi-annually, quarterly, or monthly. For this example, let's assume we're preparing
an annual statement for the fiscal year ending December 31, 2023.
Varsity Cube 2024 +27 81 278 3372
, Step 2: Calculate Revenue
Sum up all the income your business has generated from its operations. This
includes sales of goods or services, online sales, and other income streams.
If MNE3701 Pvt Ltd sold 10,000 units of its product at R50 each, the total sales
revenue would be R500,000. Additionally, if the company made R20,000 from
consulting services, the total operational revenue would be R520,000.
Step 3: Calculate Cost of Goods Sold (COGS)
This includes all the direct costs related to the production of goods or services sold
by your business.
If the cost to produce one unit of product is R30, and you sold 10,000 units, the
COGS would be R300,000.
This includes rent, salaries, marketing expenses, utilities, and other costs involved
in running your business.
Total operating expenses for MNE3701 Pvt Ltd are R120,000.
Step 6: Calculate Operating Profit
Subtract your total operating expenses from your gross profit.
Varsity Cube 2024 +27 81 278 3372
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller VarsityC. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.95. You're not tied to anything after your purchase.
