Question

Chapter 4-4 Financial Statements

July 31 Fees Earned ……..…….380,450

Wages Expense......…………………………....….250,000

Rent Expense...……………………………...……..65,000

Supplies Expense…………………………….…….18, 250

Miscellaneous Expense...……………………....…...6,200

Terry Lambert, Capital...………………………...… 41,000

Terry Lambert, Captial………………...25,000

Terry Lambert, Drawing...……………………….... 25,000

How do I write a Case Study on this example?

Accounting 27th Edition, Chapter 4, Example 4-4

Answer 1

Terry Lambert is into profession of providing Accountancy services to his client.

For the year August 2xxx to July 2xxx he earned $380450 of fees from his services of accountancy. He has staff of 5 people to whom he paid during the year $250000. He use rented space for office. During the year his total rent expense is $65000. Necessary supplies for the services cost him $18250 and apart from this his other miscellaneous expense is 6200. During the starting of the year hs capital was $41000 and during the year end it was $25000. His total drawing fir the year is $25000. He has also introduced capital of $9000.

Proft the year is $41000 (380450-250000-65000-18250-6200), which is 11% of his earning.

To increas his profit margin, he should control the expenses or either increase the business.