DALIAN POLYTECHNIC UNIVERSITY

Business Report:

By:
HALA EL ASRAOUI
229G02

1
DALIAN POLYTECHNIC UNIVERSITY

 Question 1:

Business: Sparkle & Shine Cleaning Services

Location: San Francisco, California
Service: Residential house cleaning
Organization Form: Sole Proprietorship

Reasons for Sole Proprietorship:

o Simplicity and ease of setup and maintenance.
o Full control over business decisions and operations.

Reasons not choosing other forms:

o Partnership: Not necessary as I have the skills and resources to operate
independently.
o Private/Public Company: Too complex and expensive for a small, service-
based business.

2
DALIAN POLYTECHNIC UNIVERSITY

 Question 2:

Market Research and Possible Transactions for October 2023:

Transactions:

 Oct 1: Open bank account and deposit initial investment ($5,000).

 Oct 3: Purchase cleaning supplies and equipment ($1,000).
 Oct 4-10: Conduct initial consultations with potential clients (5 consultations at $50 each).
 Oct 11-25: Provide cleaning services to clients (10 cleans at $200 each).
 Oct 15: Pay monthly rent for office space ($500).
 Oct 20: Purchase marketing materials and online advertising ($300).
 Oct 22: Pay for website domain and hosting ($200).
 Oct 27: Pay for professional liability insurance ($150).
 Oct 29: Receive payment for cleaning services conducted in October ($2,000).
 Oct 31: Pay monthly utilities bill ($100).

Sources:

 https://www.prnewswire.com/news-releases/cleaning-services-market-to-be-worth-616-98-
billion-by-2030-grand-view-research-inc-301907875.html
 https://www.ibisworld.com/united-states/market-research-reports/commercial-cleaning-
sanitation-services-industry/
 https://homeguide.com/costs/house-cleaning-prices

3
DALIAN POLYTECHNIC UNIVERSITY

 Question 3:

General Journal:

Date Account Debit Credit Narration

1-Oct Cash 5,000 Initial Investment
Cleaning Purchase of
Supplies & 1,000 Cleaning Supplies &
Equipment Equipment
Payment of Rent
15-Oct Rent Expense 500
Expense
Cash 500
Marketing & Payment of
20-Oct Advertising 300 Marketing &
Expense Advertising Expense
Cash 300
Payment of Website
Website Domain
22-Oct 200 Domain & Hosting
& Hosting Expense
Expense

Cash 200

Professional Payment of
27-Oct Liability Insurance 150 Professional Liability
Expense Insurance Expense
Cash 150
Accounts Revenue from
29-Oct 2,000
Receivable Cleaning Services
Cleaning Service
2,000
Revenue
Payment of Utilities
31-Oct Utilities Expense 100
Expense
Cash 100

Unadjusted Trial Balance:

4
DALIAN POLYTECHNIC UNIVERSITY

Account Debit Credit

Cash 950
Cleaning Supplies
1,000
& Equipment
Rent Expense 500
Marketing &
Advertising 300
Expense
Website Domain &
200
Hosting Expense
Professional
Liability Insurance 150
Expense
Accounts
2,000
Receivable
Cleaning Service
2,000
Revenue
Utilities Expense 100

Total 5,200 5,200

 Question 4:

5
DALIAN POLYTECHNIC UNIVERSITY

Adjusting Entries:

Date Account Debit Credit Narration

Rent Adjustment for Rent

31-Oct 416.67
Expense Expense

Prepaid 416.6
Rent 7

Adjustment for
Cleaning
31-Oct 750 Cleaning Supplies
Expense
Used

Cleaning
Supplies & 750
Equipment

Salaries Adjustment for

31-Oct 500
Expense Accrued Salaries

Salaries
500
Payable

Adjusted Trial Balance:

Account Debit Credit

6
DALIAN POLYTECHNIC UNIVERSITY

Cash 950

Cleaning Supplies
250
& Equipment

Prepaid Rent 83.33

Accounts
2,000
Receivable

Salaries Payable 500

Rent Expense 916.67

Cleaning Expense 750

Marketing &
Advertising 300
Expense
Website Domain &
200
Hosting Expense
Professional
Liability Insurance 150
Expense
Utilities Expense 100
Cleaning Service
2,000
Revenue
Total 5,449.97 5,500

 Question 5: Merchandising Business

7
DALIAN POLYTECHNIC UNIVERSITY

 Business: The Eco Store

 Product: Eco-friendly cleaning supplies

Transactions:

Nov 1: Owner contribution of $10,000.

Nov 2: Purchase of inventory ($5,000).
Nov 5: Sale of 10 eco-friendly laundry detergents ($15 each).
Nov 7: Purchase of eco-friendly cleaning wipes ($2,000).
Nov 10: Sale of 5 eco-friendly all-purpose cleaners ($20 each).
Nov 12: Sale of 3 eco-friendly dishwashing liquids ($10 each).
Nov 15: Payment of rent ($750).
Nov 18: Purchase of marketing materials ($400).
Nov 20: Sale of 8 eco-friendly laundry detergents ($18 each).
Nov 22: Payment for utilities ($120).
Nov 25: Sale of 2 eco-friendly all-purpose cleaners ($22 each).
Nov 27: Purchase of eco-friendly sponges ($500).
Nov 29: Sale of 1 eco-friendly dishwashing liquid ($12).
Nov 30: Payment for salaries ($2,000).

General Journal:
November 2023:

8
DALIAN POLYTECHNIC UNIVERSITY

Date Account Debit Credit Narration

1-Nov Cash 10,000 Owner contribution

2-Nov Inventory 5,000 Cash Purchase of inventory

Sale of 10 laundry
3-Nov Cash 150 Sales Revenue
detergents

Purchase of cleaning
4-Nov Inventory 2,000 Cash
wipes

Sale of 5 all-purpose
5-Nov Cash 100 Sales Revenue
cleaners

Sale of 3 dishwashing
6-Nov Cash 30 Sales Revenue
liquids

7-Nov Rent Expense 750 Cash Payment for rent

Marketing &
Purchase of marketing
8-Nov Advertising 400 Cash
materials
Expense

Sale of 8 laundry
9-Nov Cash 144 Sales Revenue
detergents

Utilities
10-Nov 120 Cash Payment for utilities
Expense

Sale of 2 all-purpose
11-Nov Cash 44 Sales Revenue
cleaners

12-Nov Inventory 500 Cash Purchase of sponges

Sale of 1 dishwashing
13-Nov Cash 12 Sales Revenue
liquid

Salaries
14-Nov 2,000 Cash Payment for salaries
Expense

Adjusted Trial Balance:

9
DALIAN POLYTECHNIC UNIVERSITY

Income
Account Debit Credit
Statement
Cash 2,228.33
Inventory 4,725
Prepaid Rent 125
Salaries Payable 416.67
Accounts
30
Receivable
Total Current
7,078.33
Assets
Rent Expense 1,375 Expenses
Cost of Goods Sold 2,775 Expenses
Marketing &
Advertising 400 Expenses
Expense
Utilities Expense 220 Expenses
Salaries Expense 2,416.67 Expenses
Sales Revenue 685 Revenue
Total 14,069.97 14,069.97
Gross Profit 410
Net Loss -3,726.67

 Question 6:

The Statement of Cash Flow (SCF) is a crucial financial statement that shows how a company generates
and uses its cash during a specific period. Unlike the income statement and balance sheet, which focus on
accounting profits and assets, the SCF provides a clear picture of the actual movement of cash into and
out of the business. This information is incredibly valuable for assessing a company's financial health,
liquidity, and solvency.

 YouCan:

YouCan is a Moroccan e-commerce company founded in 2015. It operates a leading online

marketplace that connects sellers with buyers across Morocco and the Middle East and North
Africa region. YouCan's main business activities include:

 Marketplace platform: Providing a platform for sellers to list and sell products across
various categories.
 Logistics services: Partnering with logistics providers to offer fulfillment and delivery
services.

10
DALIAN POLYTECHNIC UNIVERSITY

 Payment processing: Facilitating secure and convenient payment solutions for buyers and
sellers.
 Marketing and advertising: Promoting the platform and attracting buyers and sellers.

Analysis of YouCan's 2023 Statement of Cash Flow (Extracted Information):

 Operating Activities:

 Cash flow from operations: MAD 200 million

 Breakdown:
o Cash inflows: Mainly from customer payments for purchases on the platform
o Cash outflows: Mainly payments to sellers, logistics providers, and other
operational expenses

 Investing Activities:

 Net cash used in investing activities: MAD 50 million

 Breakdown:
o Investments in technology infrastructure and platform development
o Acquisitions of other companies in the e-commerce space

 Financing Activities:

 Net cash used in financing activities: MAD 150 million

 Breakdown:
o Issuing of new shares to raise capital
o Repayment of outstanding debt

 Overall Cash Position:

Based on the extracted information, we can observe that:

o YouCan generates positive cash flow from its operations, suggesting a healthy and
profitable core business.

11
DALIAN POLYTECHNIC UNIVERSITY

o The company invests heavily in growth initiatives, indicating a commitment to

expanding its market share and services.
o YouCan raises capital through both equity and debt, demonstrating a diversified
funding strategy.

 Conclusion:

YouCan's cash position appears to be strong and sustainable. The company generates
sufficient cash from its operations to cover its expenses and invest in growth, while
maintaining a manageable debt level. This indicates a healthy financial state and positions
YouCan for continued success in the Moroccan e-commerce market.

12