The above is the 2012 to 2014 balance sheet for the company. Considering there is the availability of a new market segment, please draft the projected income statement for 2015 based on the below-given information.

After observing a segment of consumers purchasing fresh grocery items from independent specialty stores, Liambotis believed the Bakery could increase its sales to residential customers. For this option, he would rent an outdoor farmers' market booth at the Covent Garden Market located in downtown London. The market operated from May to October, and a booth rental cost $520 per season for 26 Saturdays. Another $500 would be spent on signage and supplies. Liambotis would hire a part-time employee at the minimum wage rate to sell the Bakery's loaves from 8:00 a.m. to 1:00 p.m. at the market and to set up and close the booth (an additional 60 minutes) each Saturday.

A selection of the Bakery's premium bread loaves (e.g., fresh-baked rolls artisan sourdough, and rye bread) would be sold for an average price of $4.50 per loaf (prices ranged from $2.99 to $5.99 per loaf). Liambotis liked the idea of increasing his residential customer base, connecting with customers on a personal level, and gaining more local exposure for the Bakery; however, he wondered if this was a good fit for the business. Would a temporary part-time employee be able to effectively represent the Bakery at the market? Another concern was the Bakery's ability to secure a booth at the market. Booth entry was competitive and, to be eligible, businesses needed to be local growers, farmers, or producers. Although Liambotis planned to sell loaves made from locally-sourced ingredients, most of his primary suppliers were not from London.

Preparation of projected statement of balance sheet:

 

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ASSETS Current assets Cash Marketable securities Accounts receivable Inventory Total current assets Fixed Assets Building, cost Trucks, cost Equipment, cost Furniture and fixtures, cost Total cost Less: Accumulated amortization Total fixed assets, net Total Assets EXHIBIT 3: THE ITALIAN BAKERY-BALANCE SHEETS (AS AT DECEMBER 31) LIABILITIES Current liabilities Bank line of credit (limit $50,000) Accounts payable Current portion of long-term debt Total current liabilities Long-term liabilities Bank loan Shareholder loan Total long-term liabilities Total Liabilities EQUITY Common stock Retained earnings Total Equity TOTAL LIABILITIES AND EQUITY Source: Company files $ 2014 5,096 1,765 94,207 8,614 109,682 250,000 79,500 148,576 27,586 505,662 366,117 139,545 $ 249,227 $ 38,074 27,308 12,000 77,382 36,000 26,250 62,250 $ 139,632 35,000 74,595 109,595 $ 249,227 $ 2013 5,029 1,321 92,525 7,974 106,849 250,000 79,500 148,576 27,586 505,662 345,792 159,870 $ 266,719 $ 41,490 30,272 12,000 83,762 48,000 37,504 85,504 $ 169,266 35,000 62,453 97,453 $ 266,719 2012 $ 4,536 1,098 80,879 4,756 91,269 250,000 79,500 123,450 19,450 472,400 325,467 146,933 $ 238,202 $ 22,955 16,880 12,000 51,835 60,000 35,500 95,500 $ 147,335 35,000 55,867 90,867 $ 238,202 ASSETS Current assets Cash Marketable securities Accounts receivable Inventory Total current assets Fixed Assets Building, cost Trucks, cost Equipment, cost Furniture and fixtures, cost Total cost Less: Accumulated amortization Total fixed assets, net Total Assets EXHIBIT 3: THE ITALIAN BAKERY-BALANCE SHEETS (AS AT DECEMBER 31) LIABILITIES Current liabilities Bank line of credit (limit $50,000) Accounts payable Current portion of long-term debt Total current liabilities Long-term liabilities Bank loan Shareholder loan Total long-term liabilities Total Liabilities EQUITY Common stock Retained earnings Total Equity TOTAL LIABILITIES AND EQUITY Source: Company files $ 2014 5,096 1,765 94,207 8,614 109,682 250,000 79,500 148,576 27,586 505,662 366,117 139,545 $ 249,227 $ 38,074 27,308 12,000 77,382 36,000 26,250 62,250 $ 139,632 35,000 74,595 109,595 $ 249,227 $ 2013 5,029 1,321 92,525 7,974 106,849 250,000 79,500 148,576 27,586 505,662 345,792 159,870 $ 266,719 $ 41,490 30,272 12,000 83,762 48,000 37,504 85,504 $ 169,266 35,000 62,453 97,453 $ 266,719 2012 $ 4,536 1,098 80,879 4,756 91,269 250,000 79,500 123,450 19,450 472,400 325,467 146,933 $ 238,202 $ 22,955 16,880 12,000 51,835 60,000 35,500 95,500 $ 147,335 35,000 55,867 90,867 $ 238,202

Answer rating: 100% (QA)

To prepare the projected income statement for 2015 we need to make certain assumptions based on the given information We assume that the Italian Baker... View the full answer