KIM FULLER REPORT

1. What information will Fuller need to manage the business? Classify

this information in two categories: accounting information and nonaccounting information.
. Kim Fuller will require data about all the incomes, expenditures, liabilities and
assets of the business, apart from all the non-accounting information.
. The accounting information includes the purchase of a used truck, three
trailers, two grinding machines, supplies and parts, personal computer,
accounting system software and a warehouse. It also includes his capital, the
capital provided by his siblings and the mortgage given by the bank. He would
also have to provide information about the tax returns.
. The non-accounting information includes the signing of contracts with two
bottling companies, seeking the advice of Marion Zimmer and hiring a truck
driver and two grinding machine workers.

2. See what you can do to draw up a beginning-of-business list of the assets and
liabilities of Fuller's company making any assumptions you consider useful. How
should Fuller go about putting a value on the company's assets? Using your
values, what is the company's opening owners' equity?
Balance Sheet
Liabilities

Amount

Assets

Amount

Fuller's Capital

75000

Cash

49800

Fuller's sibling's
Capital

90000

Building

162000

Bank Loan

112000

Vehicles

42000

Machinery

20000

Supplies and parts

1000

Computer

2000

Accounting Computer
Software

200

277000

277000

 To calculate the total value of the assets, Fuller has to

take the sum of all the individual assets available to his
business, which amounts to $277,000.
The companys opening owners equity = Fullers capital
+ Fullers siblings capital = $165,000.

3. Now that Fuller has started to make sales, what

information is needed to determine "profit and loss"?
What should be the general construction of a profit and
loss analysis for Fuller's business? How frequently should
Fuller do such an analysis?
To determine profit and loss, Fuller needs to consider all the
expenses incurred and incomes earned by the business.
The expenses would include all trade expenses and office
expenses, which are debited. The incomes would include all
operating and non-operating incomes, which are credited.

Dr.

Cr.
Trading and Profit and Loss Account for the period ending

Particulars
To Opening stock
To Purchases
To gross profit c/d

To selling and distribution

expenses

Amount

Particulars
By sales
By closing stock

Amount

By Gross Profit b/d

To administrative expenses
To depreciation and
maintenance

By interests received

To financial expenses
To abnormal losses
To net profit transferred to
capital

By discounts received
By commission
received

Kim Fuller should ideally do such an analysis on a quarterly basis as the

business is young and small.

4. What other kinds of changes in assets, liabilities, and

owners' claims will need careful recording and reporting
if Fuller is to keep in control of the business?
Fuller must carefully record and report the changes in the
value of his current and future assets.
He should record the change in liabilities to assets if and when
he pays back the bank loan and the capital provided by his
siblings.
As Fuller is working at the company, he needs to record any
salary that he claims for himself.
He must also consider his siblings claims against their
investments.

Thank You.
Prepared by,
Group A
Sukanya T.
Nivin Vinoi
Tomin Baby
Joseph Philip
Deepu Jacob