# Fictional practice case cards A–F

All dollar amounts are AUD and invented. Each case states its assumptions. Do not use them as a real business forecast, investment comparison or tax example.

## A · Mina's Bike Repairs · sole-trader position

At a single date, the business controls cash **$9,000**, repair tools **$5,000** and customer amounts owed to it (accounts receivable) **$1,000**. It owes a bank **$4,000** and suppliers **$1,000** (accounts payable). No other balances exist in this simple case. Assets = **$15,000**; liabilities = **$5,000**; owner's equity = **$10,000**. Mina's privately owned bicycle, kept outside the business, is not in these accounts. A shareholder does not exist in this sole-trader case.

## B · Mara's Home Tutoring · one simplified service period

Opening business cash and equity are each **$2,000**, with no other opening balances. During the period, tutoring services worth **$1,200** are provided: customers pay **$700** now and owe **$500**. Business operating costs are **$600**: **$450** paid and **$150** electricity owed. Assume no GST, tax, depreciation, owner drawings, new capital, other income/expenses or investing/financing cash flows. Statement of Profit or Loss: revenue **$1,200** − expenses **$600** = net profit **$600**. Statement of Cash Flows, operating section: received **$700** − paid **$450** = net cash from operations **$250**. Closing cash **$2,250**; closing receivables **$500**; electricity payable **$150**; equity **$2,600**. Check: **$2,750 assets = $150 liabilities + $2,600 equity**. Profit is not cash because some services remain unpaid and one expense is unpaid.

## C · Kestrel Community Print · trading activity

The business sells printed goods for **$2,400** in a period. Inventory used in those goods cost **$1,100** (Cost of Goods Sold); other operating expenses total **$550**. Under this simplified example, net profit = **$2,400 − $1,100 − $550 = $750**. Cash collected from customers is **$1,900**; cash paid to suppliers is **$1,300** and other operating cash payments are **$500**, giving net cash from operations **$100**. These two summaries do not supply opening/closing inventory, receivables, payables or cash; do not invent a closing Statement of Financial Position. No GST, tax, depreciation or other flows are modelled.

## D · Who owns it? Four fictional plans

**Dee** begins a one-person service business as sole trader. **Dee and Ari** consider a **general partnership** and a written agreement; in this scenario they do not form a separate company and general partners have unlimited liability for its obligations. Other legally defined partnership forms differ. **The Orchard Studio Pty Ltd** is a fictional proprietary company with shareholders and directors. **North Quay Supplies Ltd** is a fictional public company; it is **unlisted** in this scenario. A public company can be unlisted; a company is a separate legal entity. Liability protection for shareholders is not an absolute protection for directors or every circumstance. See [ASIC company types](https://www.asic.gov.au/for-business-and-companies/companies/company-building-blocks/company-types), [business.gov.au's partnership types](https://business.gov.au/planning/business-structures-and-types/business-structures/partnership) and [ownership comparison](https://business.gov.au/planning/business-structures-and-types/business-structures/choose-your-business-structure) before making any real-world claim.

## E · Two deliberately small position panels

Both panels are fictional, at one date and in AUD. **River Post**, a sole-trader trading business: cash **$7,000**, receivables **$2,000**, inventory **$3,000**, equipment **$8,000**; accounts payable **$3,000**, loan **$5,000**, owner's equity **$12,000**. **Metro Supply Ltd**, a fictional unlisted public company: cash **$10,000**, receivables **$5,000**, inventory **$7,000**, equipment **$18,000**; accounts payable **$6,000**, loan **$14,000**, shareholders' equity **$20,000**. Both classify resources and obligations; the equity label reflects ownership. Neither panel alone proves profit, cash generation, value, solvency or a good investment. Calculated totals: River **$20,000 = $8,000 + $12,000**; Metro **$40,000 = $20,000 + $20,000**.

## F · The decision desk

**Kai** can compare a deposit with buying shares using public information; risk, access to cash, timeframe and ownership differ. **Sam** instead considers running a small bicycle-service business, taking on operating work and obligations. This is an analytical contrast, not a ranking or recommendation. A shareholder owns an interest in a company; a sole trader owns and runs their business directly. An accountant can prepare/interpret records and advise within their role; an auditor provides an independent opinion on a financial report where an audit is required. Neither role guarantees profit. Check current [MoneySmart investment descriptions](https://moneysmart.gov.au/how-to-invest/choose-your-investments) and [ASIC's account of financial reports](https://www.asic.gov.au/for-business-and-companies/companies/company-financial-reports).