ACCOUNTING ANALYSIS

Accounting analysis

Accounting Analysis

Task 1

The amount required in starting a business (hotel) is approximately 1000000. The amount of capital that will be invested is 700000 and the remaining amount will be financed from the bank with an amount of 200000 and the remaining 100000 will be financed from the friends and other family members. The form of business will be sole proprietorship or the sole trader because it will be owned by only one individual and also there will be no legal distinction between the owner and the business. In this business the owner is only responsible for the losses and the debt and also every assets of the organization is also owned by the owner. The sole proprietorship is owned by only one owner and hence the profit and the los, all belongs to owner so it will be beneficial for the business to start a business that belongs to only one owner. Therefore, starting a business for hotel sole proprietorship will be beneficial. The items that are required to buy are the food, shop (land or area), furniture, machinery, decoration. The decoration, food, and the furniture will be on the cash while shop (land) and the machinery will be on the rent.

Items

Cost

Food items

100000

Furniture

300000

Machinery

100000

Decoration

100000

Land

200000



Though rent and the machinery are not being bought on loan, however the administrative cost that will be incurred, per day salaries expense for the people hired for working in hotel, distributors, office rent, energy consumption (electricity and the telephone bills) that will be incurred, hence there should be at least 200000 in hand and the land and the machinery cost that will be incurred, it would be directly paid through the bank loan and others. The cash in hand will be useful for the purpose of the insurance and other expenses that will be incurred in running the business like selling expense for instance the advertising expenses and others.

Task 2

Mantana should apply for the installment loans that will be made for a fixed amount at the time for the approval of application. The will be paid along with the fixed monthly payment and as the 38000 is not a big amount hence there will be less interest charges for the payment and also having an opportunity to repay within a single month otherwise there will also be a chance of paying the principal amount along with the less interest charges.

Amani should apply for the unsecured loans as the 650 is not a big amount and therefore the collateral is not required and it will be based on the credit score and the ability to repay the loan. Hence in paying insurance and the road tax for the delivery of van unsecured loans would be a better option as Amani has ability to repay the loan and also having the ability to pay it back within four months.

If Ian is thinking to buy the beauty salon then the installment loans would be the better option in order to start the business of beauty salon because at ...