Balance sheet: Baines Nursery as at 30 September 2004
Freehold land/buildings £ 30000 Proprietor's capital £35000
Cash at bank £ 5000
Between 1 October and 14 November the Baines employ a builder to undertake the necessary alterations. For the purposes of this case study we will assume that the cost of the alterations was exactly the same as his estimate, £10 000. He funded the alterations by borrowing £10 000 from the bank. This gives the following action:
· Assets (freehold property)+£10 000
combined with a reaction:
· Assets (bank loan)-£10 000
