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While Pursuing His Undergraduate Studies Bruno Clarke Needed To Earn PDF

Bruno Clarke started a lawn care business over the summer to earn money for university. He purchased equipment and a truck, taking out a loan. By the end of the summer, Bruno had earned $25,200 in revenue but incurred $9,500 in expenses. After paying back the loan and other costs, Bruno realized a profit from the business and saw potential to continue it going forward.

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252 views1 page

While Pursuing His Undergraduate Studies Bruno Clarke Needed To Earn PDF

Bruno Clarke started a lawn care business over the summer to earn money for university. He purchased equipment and a truck, taking out a loan. By the end of the summer, Bruno had earned $25,200 in revenue but incurred $9,500 in expenses. After paying back the loan and other costs, Bruno realized a profit from the business and saw potential to continue it going forward.

Uploaded by

hassan taimour
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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While pursuing his undergraduate studies Bruno Clarke

needed to earn #836


While pursuing his undergraduate studies, Bruno Clarke needed to earn sufficient money for the
coming academic year. Unable to obtain a job with a reasonable salary, he decided to try the
lawn care business for three months during the summer. After a survey of the market potential,
Bruno bought a used pick-up truck on June 1 for $ 3,000. On each door he painted “Bruno’s
Lawn Service, Tel: 555- 9623.” He also spent $ 1,800 for mowers, trimmers, and tools. To
acquire these items, he borrowed $ 5,000 cash by signing a note payable, promising to pay the
$ 5,000 plus interest of $ 150 at the end of the three months (ending August 31). At the end of
the summer, Bruno realized that he had done a lot of work, and his bank account looked good.
This fact prompted him to become concerned about how much profit the business had earned.
A review of the cheque stubs showed the following: bank deposits of collections from customers
totalled $ 25,200. The following cheques had been written: gas, oil, and lubrication, $ 1,840;
mower repair, $ 150; helpers, $ 9,500; payroll taxes, $ 400; truck repairs, $ 410; payment for
assistance in preparing payroll tax forms, $ 50; insurance, $ 240; telephone, $ 210;
miscellaneous supplies used, $ 160; and $ 5,150 to pay off the note, including interest (on
August 31). A notebook kept in the truck, plus some unpaid bills, reflected that customers still
owed him $ 1,250 for lawn services rendered and that he owed $ 200 for gas and oil (credit card
charges). He estimated that the cost for use of the truck and the other equipment (depreciation)
for three months amounted to $ 1,000. Required: 1. Prepare a quarterly statement of earnings
for Bruno’s Lawn Service for the months of June, July, and August 2014. Use the following
main captions: Revenues from services, Expenses, and Net earnings. Because this is a sole
proprietorship, the company will not be subject to income tax. 2. Prepare a statement of
financial position for Bruno’s Lawn Service as at August 31, 2014. Bruno’s business is a
proprietorship with one equity item: Bruno Clarke, capital. 3. Do you see a need for one or more
additional financial reports for this business for 2014 and thereafter? Explain.View Solution:
While pursuing his undergraduate studies Bruno Clarke needed to earn

ANSWER
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