Make a balance sheet out of the information A handmade crochet blanket company produced $15,000 in sales
Question:
Make a balance sheet out of the information
A handmade crochet blanket company produced $15,000 in sales every quarter in its first year. After subtracting $5,000 from cost of goods sold and $3,000 from operational expenditures, the company consistently turned a $10,000 profit. After deducting the original $20,000 investment, the net income was $28,000 based on the total yearly revenue of $60,000. In the next years, this earnings will be reinvested to broaden the product offering and consumer outreach.
Explanation:
Income Statement for Handmade Crochet Blankets Business
Quarterly Revenue and Expenses
Q1 (Jan - Mar)
Revenue: $15,000
Cost of Goods Sold (COGS): $5,000
Gross Profit: $10,000
Operating Expenses: $3,000
Profit/Loss: $7,000
Q2 (Apr - Jun)
Revenue: $15,000
Cost of Goods Sold (COGS): $5,000
Gross Profit: $10,000
Operating Expenses: $3,000
Profit/Loss: $7,000
Q3 (Jul - Sep)
Revenue: $15,000
Cost of Goods Sold (COGS): $5,000
Gross Profit: $10,000
Operating Expenses: $3,000
Profit/Loss: $7,000
Q4 (Oct - Dec)
Revenue: $15,000
Cost of Goods Sold (COGS): $5,000
Gross Profit: $10,000
Operating Expenses: $3,000
Profit/Loss: $7,000
First-Year Total
Revenue: $60,000
Cost of Goods Sold (COGS): $20,000
Gross Profit: $40,000
Operating Expenses: $12,000
Net Income: $28,000
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura