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Vanya Quisto - Boat Business

The document describes a friend's boat business over 5 years, including details of boats bought and sold each year, expenses paid, and amounts owed or due at the end of each year.

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Vanya Quisto
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38 views1 page

Vanya Quisto - Boat Business

The document describes a friend's boat business over 5 years, including details of boats bought and sold each year, expenses paid, and amounts owed or due at the end of each year.

Uploaded by

Vanya Quisto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Boat Business

Your friend opened a boat business on Jan 1, 20xl. She started with 250,000 of her own money and
100,000 borrowed from the bank. During the year she bought three boats for 200,000 each. She sold
two of the boats for 250,000 each. Other expenses she paid cash for were: utilities 1,000; wages, 20,000;
and rent, 12,000. At the end of the year, she owed her workers’ wages of 1 ,000. So how did your friend
do?

Boat Biz- Year 2

During the second year she bought 4 boats and sold four boats. The boats cost her 220,000 each. She
sold the boats for 260,000 each. When she bought the boats in the second year, she paid 50% down in
the year of purchase and was to pay the balance in the following year. Also, when she sold the boats,
she got 50% down and the balance in the following year. During the year she paid cash for, wages
26,000; utilities of 2,000 and rent of 8,000. At the end of the year, in addition to what she owed on the
boats, she owed rent of 4,000 and wages of 2,000. So how did she do the second year?

Boat Biz Year 3: During the third year she paid the money she owed for last year’s merchandise and
received the money due her from last year’s sales. Also, during the third year she bought 5 boats and
sold four. The boats cost her 225,000 each and she sold them for 270,000 apiece. She bought the boats
by paying 100,000 down each and will pay the rest next year. She sold the boats for h down and the rest
the following year. She paid rent of 16,000. which represented current years rent plus the rent she owed
at the end of the prior year. She paid cash wages of 30,000 and utilities of 3,000. At the end of the year,
she owed wages of 3,000. So how did she do the third year?

Boat Biz- Year 4 Paid all her beginning accounts payable and received all owed her. Bought 5 boats, sold
four. Bought for 230,000 each, sold for 280,000. Bought for h down and h next year. Sold for h down
and h next year. Paid workers what she owed them at the beginning plus 4,000 per month for eleven
months, owed wages of 4,000 at the end of the year for December. Paid 3 000 for utilities. On June 30,
bought a building for a second location from which to sell the boats. The building and land cost 200,000.
It is expected that the building will last ten years and then the land and building will be worth about 20%
of the original cost. To buy the building, she borrowed 160,000 from the bank and used $40,000 of the
company's money. She must pay the bank 10% interest at the end of each year. She paid the Year 4
interest on December 31. She spent 40,000 in furniture and fixtures for the new building. It is estimated
that these items will last 10 years and then be worth 10% of their value.

She opened her new location on October 1. She paid Il months’ rent on her first location at 1,000 per
month.

To Work! (Prepare Financials)

Boat Biz- Year 5 Paid beg of the year accounts payable and received the beg of the year accounts
receivable. Bought 6 boats, sold six. Bought for 240,000 each, sold for 300,000. Bought for h down and
12 next year.

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