Required information CC1-1 Financial Statements for a Business Plan [LO 1-2, LO

Question

Required information CC1-1 Financial Statements for a Business Plan [LO 1-2, LO 1-3] [The following information applies to the questions displayed below.J Nicole Mackisey is thinking of forming her own spa business, Nicole's Getaway Spa (NGS). Nicole expects that she and two family members will each contribute $10,000 to the business and receive 1,000 shares each. Nicole forecasts the following amounts for the first year of operations, ending December 31, 2018: Cash on hand and in the bank, $4,050; amounts due from customers from spa treatments, $1,970; building and equipment, $73,000; amounts owed to beauty supply outlets for spa equipment, $4,850; notes payable to a local bank for $39,770. Cash dividends of $4,600 will be paid to the stockholders during the year. Nicole also forecasts that first-year sales revenues will be $77,000; wages will be $33,500; the cost of supplies used up will be $16,500; office expenses will be $14,500; and income taxes will be $3,500 C1-1 Part 2

Explanation / Answer

income statement sales revenue 77,000 less:expenses wage expense -33500 supplies expense -16500 office expenses -14500 income taxes -3500 net income 9,000         Statement of Retained Earnings Retained earnings,January 1,2018 0 Add:Net income 9,000 less: dividends 4,600 Retained earnings,december 31,2018 4,400

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