Jennifer decides that she will go into the tourist industry onLake Geneva, and buy...

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Accounting

Jennifer decides that she will go into the tourist industry onLake Geneva, and buy a concession to hire out canoes on the lake.She borrows CHF40,000 (CHF is swiss currency) from her parents andputs CHF20,000 in herself. The arrangment with the Canton is thatshe pays CHF50,000 at the start for the concession, which runs fiveyears, but must also pay an annual rental of CHF10,000 at the endof the season in october. She negotiates a deal with a canoesupplier who sells her 20 canoes for CHF 30,000 but agrees that sheshould pay CHF10,000 on delivery and the rest a year later. Duringthe season she receives CHF 90,000 (cash) in canoe rentals.
Task: Making and specifying whatever assumptions youwish, you are asked to draw up a simple statement of profit or lossfor the first year and statement of finacial postiton at the end ofthe year.

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Statement of profit and loss Particulars Amount in CHF Amount received by way of Canoe rentals 90000 Less Purchase of Canoes 30000 Amortization of the start up cost of See Answer

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Transcribed Image Text

In: AccountingJennifer decides that she will go into the tourist industry onLake Geneva, and buy a...Jennifer decides that she will go into the tourist industry onLake Geneva, and buy a concession to hire out canoes on the lake.She borrows CHF40,000 (CHF is swiss currency) from her parents andputs CHF20,000 in herself. The arrangment with the Canton is thatshe pays CHF50,000 at the start for the concession, which runs fiveyears, but must also pay an annual rental of CHF10,000 at the endof the season in october. She negotiates a deal with a canoesupplier who sells her 20 canoes for CHF 30,000 but agrees that sheshould pay CHF10,000 on delivery and the rest a year later. Duringthe season she receives CHF 90,000 (cash) in canoe rentals.Task: Making and specifying whatever assumptions youwish, you are asked to draw up a simple statement of profit or lossfor the first year and statement of finacial postiton at the end ofthe year.