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Manele, a financial consultant, has been self-employed for two years. His list of clients has grown and he is earning a reputation as a shrewd investor. Manele rents a small office, uses the pool secretarial services, and has purchased a vehicle that he is depreciating over three years.

The following income statements cover Charles's first two years of business:

Year 1 Year 2

Commission revenue 25000 65000

Rent 12000 12000

Secretarial services 3000 9000

Car expenses, gas, insurance 6000 6500

Depreciation 15000 15000

Net income 11000 22500

Manele believes that he should earn more than R11 500 for working very hard for two years. He is thinking about going to work for an investment company where he can earn R40 000 per year. What would you advise Manele to do?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92748853

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