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2. [Final Subheading] Depreciation expense:

  • Equipment (percentage x price); Vans (percentage x price);Loan & Bank interest (percentage x price)
  • Equipment & Vans (percentage x price); Loan & Bank interest (percentage x price)
  • (percentage x price)

3. Third heading

  • Rent & Rates; Bad debts; Accrual (720 x 1/3)
  • Rent & Rates; Heat & Light; Accrual (720 x 1/3)
  • Rent & Rates; Heat & Light; Trade payables

4. Advising how amount charged for loan and bank interest could be reduced

  • Arrange loan instead of over draft; incerase sales; reduce drawings; new loan or O/D at lower rate
  • Increases cost of sales; decreases gross & net profit:reduces assets in balance sheet

5. Final result:

  • Net profit
  • Gross Profit
  • Total sales
  • Total Income

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