Meadow Makers is a social enterprise that sells craft kits and uses some of its profit to fund weekend activities for children. The business has been offere...
Question 1 Report
Meadow Makers is a social enterprise that sells craft kits and uses some of its profit to fund weekend activities for children. The business has been offered a new retail unit. The manager provided the following information to the committee: non-current assets are $250 000, current assets are $110 000, current liabilities are $70 000 and non-current liabilities are $140 000. The committee wants to know the value owned by the business after its debts are deducted. It also wants to compare this figure with the amount of finance invested by members before selecting the retail-unit option. The manager says accounts provide useful information, but they do not measure the social benefit created for children.
(a) State the total current liabilities of Meadow Makers. [1]
(b) Define net assets. [1]
(c) Calculate the net assets of Meadow Makers. Show your working. [3]
(d) Analyse whether net assets alone are enough information for the committee to select the new retail unit. [5]
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