Nicole Mackisey is thinking of forming her own spa business, Nicoles Getaway Spa (NGS). Nicole expects that

Question:

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, 2015: Cash on hand and in the bank, $ 2,150; amounts due from customers from spa treatments, $ 1,780; building and equipment, $ 70,000; amounts owed to beauty supply outlets for spa equipment, $ 4,660; notes payable to a local bank for $ 38,870. Cash dividends of $ 2,000 will be paid to the stockholders during the year. Nicole also forecasts that first- year sales revenues will be $ 40,000; wages will be $ 24,000; the cost of supplies used up will be $ 7,000; office expenses will be $ 5,000; and income taxes will be $ 1,600.
Required:
1. Based on Nicole’s estimates, prepare a (forecasted) income statement for Nicole’s Getaway Spa for the year ended December 31, 2015.
2. Prepare a (forecasted) statement of retained earnings for Nicole’s Getaway Spa for the year ended December 31, 2015.
3. Prepare a (forecasted) for Nicole’s Getaway Spa at December 31, 2015.
4. As of December 31, 2015, would most of the financing for assets come from creditors or stockholders? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...