Use the information below to draft your fist year income statement and balance sheet for January 1 to December 31, 2020.

• On your Income Statement, be sure to detail your sales, COGS, Gross Profit, Expenses, Net Profit before tax, Net profit after tax.
• On your Balance Sheet, be sure to detail your Fixed Assets, Current Assets, Liabilities, Retained Earnings and Equity.

Your first year of business went like this:

• You decided to use your savings of $20,000 to start your new restaurant.
• You went to your bank with your business plan to request a loan. They rejected your request as you did not have enough capital, collateral or credit history with the bank.
• Your family gave you $30,000 to start your business. They did not expect any interest, but expected to be paid back over the next 5 years.
• You found a great location in Toronto to rent for $4,000 per month. You purchased the following:
  • Stoves, fridges, freezers and other kitchen equipment for $15,000 to be depreciated at 20% per year.
  • Tables, chairs and other furniture for $10,000, to be depreciated at 10% per year.
  • Signage and fixtures for $5,000, to be depreciated at 10% per year.
  • Cutlery, utensils, wares, pots, pans, menu’s etc. for $5,000. These are expensed in the first year.
  • You used your own car for your business which was valued at $5,000, and is to be depreciated at 20% per year.
• You opened your restaurant on January 1, 2020
• You launched your website and started advertising your opening specials on Social Media and your local community newspapers. Your spent $5,000 in marketing expenses in 2020.
• You hired two employees, one for the kitchen and another to serve customers. You would fill in as required. You paid your employees $15 an hour, just above minimum wage. They worked 10 hours / day from 11 am – 9 pm 6 days a week.
• You decided to pay yourself as the Restaurant Manager $2,000/mth until business grew.
• Sales began slowly as can be expected in January, but picked up after March. For the year, sales averaged $20,000 per month.
• The cost of the food and beverage ingredients was not very high, averaging 25% of sales.
• Utility costs were as follows: Electricity $250/mth; Gas $300/mth; Water $200/mth; Telephone and Internet $300/mth.
• Property and Liability Insurance: $1,800 / yr.
• Your vehicle expenses for gas, maintenance and car insurance totalled $4,000 for 2020.
• As a small business, your Federal Tax rate is 9% and your Provincial Tax rate is 3%.
• As of December 31 2020, you had no accounts receivable from your customers, but you owed your food and beverage suppliers $3,500. All other expenses were fully paid up. Your inventory of food and beverage ingredients amounted to $2,500.

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a first year Incore Statent and balance sheet Income statemt For yor ende... View the full answer