Flatlands, a local coffee shop, reports the following financing and investing activities as of June

$30,2023$:

The founder started the business with an equity capital contribution of $$80,000.$ In addition, she

received a bank loan of $$30,000$ for $5$ years, at an interest rate of $12\%$ per year. The rent for the

shop is $$27,600$ per year. The shop spent $$50,000$ to purchase coffee$-$making equipment and

$$30,000$ to obtain inventories. Accounts payable totaled $$30,000,$ stemming entirely from the

inventory purchase. The owner maintains a checking account that has a balance of $$60,000.$ Based

on the above information, prepare Flatlands$’$ initial balance sheet as of June $30.$

Now, prepare the shop$’$s income statement as of December $31$ using the following information:

Price of each cup of coffee is $$5$ and the shop sold a total of $36,000$ cups of coffee in the first $6$

months. The company incurred marketing and promotional expenses of $$25,000.$ The owner$’$s

salary and benefits totaled $$18,000.$ Total rent for the shop was $$13,800$ in the past six months.

Depreciation on the $$50,000$ equipment over six months totaled $$5,000.$ The company reported a

total of $$110,000$ in cost of goods sold. The company is in the $30\%$ tax bracket.

Let$’$s say, the shop provided several catering services for credit sales, which totaled $$30,000.$ The

value of inventories as of December $31$ is $$45,000.$ Credit purchase to produce coffee and other

snacks and desserts next year totaled $$35,500.$ Balance on cash and marketable securities has

reached $$48,000$ as of December $31.$ Prepare Flatlands$’$ balance sheet as well as statement of cash

flow as of December $31.$ Conduct a break$-$even analysis and compute the shop$’$s survival revenue.Flatlands, a local coffee shop, reports the following financing

and investing activities as of June $30,2023$:

The founder started the business with an equity capital

contribution of $$80,000.$ In addition, she received a bank loan of

$$30,000$ for $5$ years, at an interest rate of $12\%$ per year. The rent

for the shop is $$27,600$ per year. The shop spent $$50,000$ to

purchase coffee$-$making equipment and $$30,000$ to obtain

inventories. Accounts payable totaled $$30,000,$ stemming

entirely from the inventory purchase. The owner maintains a

checking account that has a balance of $$60,000.$ Based on the

above information, prepare Flatlands' initial balance sheet as of

June $30.$

Now, prepare the shop's income statement as of December $31$

using the following information:

Price of each cup of coffee is $$5$ and the shop sold a total of

$36,000$ cups of coffee in the first $6$ months. The company

incurred marketing and promotional expenses of $$25,000.$ The

owner's salary and benefits totaled $$18,000.$ Total rent for the

shop was $$13,800$ in the past six months. Depreciation on the

$$50,000$ equipment over six months totaled $$5,000.$ The

company reported a total of $$110,000$ in cost of goods sold. The

company is in the $30\%$ tax bracket.

Let's say, the shop provided several catering services for credit

sales, which totaled $$30,000.$ The value of inventories as of

December $31$ is $$45,000.$ Credit purchase to produce coffee and

other snacks and desserts next year totaled $$35,500.$ Balance on

cash and marketable securities has reached $$48,000$ as of

December $31.$ Prepare Flatlands' balance sheet as well as

statement of cash flow as of December $31.$ Conduct a break$-$

even analysis and compute the shop's survival revenue.

Answer rating: 100% (QA)

Flatlands Initial Balance Sheet as of June 30 2023 Assets Cash and Cash Equivalents 60000 Coffeemaking Equipment 50000 Less Accumulated Depreciation of 0 Inventories 30000 Total Assets 140000 Liabilit... View the full answer