How would i project 5 year income statements? ADDITIONAL EXPENSES FOR YEARS ONE

Question

How would i project 5 year income statements?

ADDITIONAL EXPENSES FOR YEARS ONE THOUGH FIVE Year 1Year 2Year 3 Year 4 Year 5 0 $12,000 $12,000 $12,000 0,800 $20,800 250 Office Space Employee(s) Office Furniture T-Shirt Designs Shirts & Printing New Computer New Printer Inventory Shelving Office Supplies Shipping Trailer for Events Gas to and from Events Average $200 per event Hotel at events Event Space Misc. Equipment Vinyl Banners Utilities Internet Service Phone Service Joe's Salary Website Advertising 200 $10,400 $200$250 250 250 $2,640 640 $2,860 $3,300 $3,850 $12,825 $24,300 $28,188 $33,048 $38,257 $200 $1,000 $1,000 $1,000 $1,000 $1,000 $300 $300 $6,750 $13,500 $14,900 $17,400 $20,450 $8,000 300 300 $1,200 $1,200 $1,600 800 $2,500$2,500 500 $1,600 $1,600 800 800 $500 $1,000 $1,200 $1,200 $1,200 $0 600 0 $1,200 $1,200 $1,200 $0 $30,000 $60,000 $60,000 $60,000 000 $6,000 $18,000 $22,000 $11,000

Explanation / Answer

Income statement projections = expected sales each year - expenses for the year

The following points should be noted:

1. Expenses for office furniture will be capitalized and hence has not been included in the income statement. Similarly, expenses towards new computer and new printer will also be capitalized and will not be included in the income statement. All these items will go to the balance sheet as assets.

Projected 5 year income statements: (all the figures are as given in the question and no assumptions have been made).

Year 1 Year 2 Year 3 Year 4 Year 5 Sales 54,000 108,000 129,600 155,520 186,624 less: expenses Office space 0 0 12,000 12,000 12,000 Employees 0 5,200 10,400 20,800 20,800 T-shirt design 2,640 2,640 2,860 3,300 3,850 Shirts and printing 12,825 24,300 28,188 33,048 38,257 Inventory shelving 1,000 1,000 1,000 1,000 1,000 Office supplies 300 300 300 300 300 Shipping 6,750 13,500 14,900 17,400 20,450 Trailer for events 8,000 0 0 0 0 Gas 1,200 1,200 1,600 1,600 1,600 Hotel for events 600 600 800 800 800 Event space 1,500 2,000 2,500 2,500 2,500 Misc equipment 500 500 500 500 500 Vinyl banners 300 0 400 0 0 Utilities 500 1,000 1,200 1,200 1,200 Internet 0 0 600 600 600 Phone 0 0 1,200 1,200 1,200 Joe's salary 0 30,000 60,000 60,000 60,000 Web advertising 18,000 22,000 11,000 8,000 6,000 Total expenses 54,115 104,240 149,448 164,248 171,057 Net Profit/(loss) (115) 3,760 (19,848) (8,728) 15,567

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