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Question 2 - [15 marks] Let's examine a case using Greg's Tunes and another company, Sally's Silly Songs. It is now the end of the first year of operations and both owners - Sally Song and Greg Tune want to know how well they did at the end of the year. Neither business kept complete accounting records. They put this data separately at the end of the year. \begin{tabular}{|ll|} \hline Sally Silly Songs & \\ Total Assets & $ \$ 23,000.00 $ \\ Sally, Capital & $ \$ 8,000.00 $ \\ Total Revenues & $ \$ 35,000.00 $ \\ Total Expenses & $ \$ 22,000.00 $ \\ & \\ Greg's Tunes & $ \$ 10,000.00 $ \\ Total liabilities & $ \$ 6,000.00 $ \\ Greg, Capital & $ \$ 44,000.00 $ \\ Total Expenses & $ \$ 9,000.00 $ \\ \hline Net Income & \\ \hline \end{tabular} To gain information for evaluating their business, they ask you several questions. For each answer, you must show your work to convince Sally and Greg that you know what you are talking about. 1. Which business has more assets? [2 marks] 2. Which business owes more to creditors? [2 marks] 3. Which business has more owner's equity at the end of the year? [ 2 marks] 4. Which business brought in more revenue? [ 2 marks] 5. Which business is more profitable? [ 2 marks] 6. Which of the foregoing questions do you think is most important for evaluating these two businesses? Why [5 marks] 7. Which business looks better from a financial standpoint and why? [ 5 marks]

          Question 2 - [15 marks]
Let's examine a case using Greg's Tunes and another company, Sally's Silly Songs. It is now the end of the first year of operations and both owners - Sally Song and Greg Tune want to know how well they did at the end of the year. Neither business kept complete accounting records. They put this data separately at the end of the year.
\begin{tabular}{|ll|}
\hline Sally Silly Songs & \\
Total Assets & \( \$ 23,000.00 \) \\
Sally, Capital & \( \$ 8,000.00 \) \\
Total Revenues & \( \$ 35,000.00 \) \\
Total Expenses & \( \$ 22,000.00 \) \\
& \\
Greg's Tunes & \( \$ 10,000.00 \) \\
Total liabilities & \( \$ 6,000.00 \) \\
Greg, Capital & \( \$ 44,000.00 \) \\
Total Expenses & \( \$ 9,000.00 \) \\
\hline Net Income & \\
\hline
\end{tabular}

To gain information for evaluating their business, they ask you several questions. For each answer, you must show your work to convince Sally and Greg that you know what you are talking about.
1. Which business has more assets? [2 marks]
2. Which business owes more to creditors? [2 marks]
3. Which business has more owner's equity at the end of the year? [ 2 marks]
4. Which business brought in more revenue? [ 2 marks]
5. Which business is more profitable? [ 2 marks]
6. Which of the foregoing questions do you think is most important for evaluating these two businesses? Why [5 marks]
7. Which business looks better from a financial standpoint and why? [ 5 marks]

Question 2 - [15 marks]
Let's examine a case using Greg's Tunes and another company, Sally's Silly Songs. It is now the end of the first year of operations and both owners - Sally Song and Greg Tune want to know how well they did at the end of the year. Neither business kept complete accounting records. They put this data separately at the end of the year.

Sally Silly Songs

Total Assets $ 23,000.00

Sally, Capital $ 8,000.00

Total Revenues $ 35,000.00

Total Expenses $ 22,000.00

Greg's Tunes $ 10,000.00

Total liabilities $ 6,000.00

Greg, Capital $ 44,000.00

Total Expenses $ 9,000.00

Net Income

To gain information for evaluating their business, they ask you several questions. For each answer, you must show your work to convince Sally and Greg that you know what you are talking about.
1. Which business has more assets? [2 marks]
2. Which business owes more to creditors? [2 marks]
3. Which business has more owner's equity at the end of the year? [ 2 marks]
4. Which business brought in more revenue? [ 2 marks]
5. Which business is more profitable? [ 2 marks]
6. Which of the foregoing questions do you think is most important for evaluating these two businesses? Why [5 marks]
7. Which business looks better from a financial standpoint and why? [ 5 marks]

Added by Darci T.

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