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Reading Review: Little oak company

Tanaphat Wongthanyalak 270185273

Ms. Debbie Williams

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The purpose of this assignment is to apply current accounting knowledge and abilities to
Little Oak article, a New Zealand firm, by identifying and discussing the benefits of
founding a company, financial and non-financial data, and accounting concepts.

Little Oak is a company that started with a single mom named Elke Pascoe. This
company manufactures and R&D about goat milk base formula which still contains a lot
of nutrients for infants and toddlers which is different from the other formula. The
business is focused on better user experience, simpler and more accessible for the
consumer, this business also focuses on the older children market by planning to
research new products such as yogurt and other bespoke nutrition ranges. As Elke
Pascoe have mention that she has been looking across the marketplace and nine out of
10 are crap “if that's what they want to eat, I want to make something that not only is
going to be good for them but good for every other child at their age and stage” (Shaw
2022)

The disadvantage to Elke Pascoe of forming a company is More expensive and

complicated to form as when Elke Pascoe starts the business, she must spend her own
money to the company as there are no investors for the company until she gets some
investors to provide her the cash for the business this is also very risk as if she does not
have enough cash to pay the business until the Invester come the business is likely to
go bankrupt.
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The business started in 2016 as her 18 months son was suffer from a bad skin condition
so she tried to find a way to cure him by start with goatmilk skincare and it helps her son
and then she realizes that, so she tried to lookback of what her son consume normally
which is the infant formula that has contain a lot of rubbish Ingredients, so she starts the
idea of making something better. It began as a hobby and progressed until she had the
formula and all the ingredients, at which point she felt obligated to provide something
better for all the children. The reason people should create their own business is to
follow their passion and job secure.

This business will need to prepare a total of three financial statement, are Statement of
comprehensive income which include income statement that use to show profit and loss
over a period. Statement of financial position for balance sheet which is used to reports
a company's assets, liabilities, and shareholder equity. Cash flow statement which
provides both cash inflow and cash outflow.

Non-financial information is the information that cannot be express in monetary term for
New Zealand will be expression in New Zealand dollar and cent (Up education). Non-
financial information for this company is the objective of the business as the founder of
this business, Elke Pascoe had mentioned that “I had a responsibility to do something
better for all children” (Shaw 2022). This shows that the objective of this business is to
produce better infant products that are based on goat milk and contain a lot of nutrients
for children.
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There are two external users in this company are Suppliers which is two partner goat
farms in Manawatū and potential investors, first external user is the supplier company
that Little Oak company must buy goods and service from such as fresh goat milk, and
another external user is who invest on the company which is help the company to afford
supply from the supplier, machine for the research and pay the wage for the employee.
These two external users make this company able to produce one of the first milk
powders in the world that still contain a lot of nutrients called “from fresh” (Shaw 2022).
Cash must be the financial information that the user is looking for as the company
needs cash to pay for the expenses and debts. Also, cash received, cash paid and
change in cash position are reported in the cashflow statement.

The liability of this company is a Present obligation as the entity has a responsibility that
cannot be avoided and is owed to a party other than the entity because Elke Pascoe
plan to build the business in North America from her dream “that really no child went
hungry wherever they are in the world” (Shaw 2022). That means Little Oak must repay
the mortgage to the bank which can take up to 30 years to payback as it is a special
type of loan to buy properties. The asset of this company is Controlled by the entity
means only the entity can receive the economic benefits from the economic resource.
This is for the entity to be able to prevent others from benefiting from this economic
resource. This is for this business to make sure that no one can benefit from this goat
milk base formula except the company itself.
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The first accounting concept for the business is monetary measurement transactions
which only be recorded if they can be measured in New Zealand monetary terms dollar
and cent (Up education). This is used when the company bought a machine from
oversea in difference currency and for the business in Australia, America, and
Singapore.

The second accounting concept for the business is Historical costs, as all transactions
are recorded at the cost paid at the time of the transaction and it is also verifiable (Up
education). This is used to make recorded all the equipment machine and supply. This
concept also helps to make diction easier and more reliable for the business.

In conclusion, this business growth will be spiking up as it has a unique type of product
for infants and toddlers which is a goat milk base formula which still contains a lot of
nutrients, and they also keep developing a new product to the marketplace.

Reference list:

Aimee Shaw (2022, Apr) Little Oak article writer

UP Education accounting e text

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