Using the spreadsheet template provided, produce an Income Statement, a Balance sheet, and a Cash Flow Statement for both scenarios using data gathered in Phase 1.

Start Up Business: Preparing Financial Statements

Now that you have completed identifying the "events" that have occurred, it

is time to prepare financial statements. You will prepare three statements:

- Income Statement (Profit and Loss Statement

- Balance Sheet (Statement of Condition)

- Cash Flow Statement

NOTE: there are totaling formulas in the statements to help you see the totals.

You will use the ending balances in all of your T accounts. You should have calculated

an ending balance for all accounts as part of Week 2 homework. If an account

had only one transaction, such as "Equipment", then that event's amount

is the final account balance.

For accounts with more than one transaction, you should have added up all the "+"

entries and subtracted all the "-" entries to come up with the ending balance.

Complete the Income Statement first. That is the most logical one to do first.

It will show "How we did."

Bring over the final balance in all accounts that were revenues or expenses.

Next complete the Balance Sheet. As with the Income Statement, bring

over the ending balances.

The ending balance in the Income Statement is the figure you will put into

Retained Earnings.

Next, do the Cash Flow Statement. It's ending balance should equal

"Cash" in the Balance Sheet.

Scenarios 1 and 2 will have differences just as your entries in last week's assignment

had differences.

Don't forget to follow syllabus instructions regarding narrative to prepare and upload separately.

Start Up Business: Preparing Financial Statements

Now that you have completed identifying the "events" that have occurred, it

is time to prepare financial statements. You will prepare three statements:

- Income Statement (Profit and Loss Statement

- Balance Sheet (Statement of Condition)

- Cash Flow Statement

NOTE: there are totaling formulas in the statements to help you see the totals.

You will use the ending balances in all of your T accounts. You should have calculated

an ending balance for all accounts as part of Week 2 homework. If an account

had only one transaction, such as "Equipment", then that event's amount

is the final account balance.

For accounts with more than one transaction, you should have added up all the "+"

entries and subtracted all the "-" entries to come up with the ending balance.

Complete the Income Statement first. That is the most logical one to do first.

It will show "How we did."

Bring over the final balance in all accounts that were revenues or expenses.

Next complete the Balance Sheet. As with the Income Statement, bring

over the ending balances.

The ending balance in the Income Statement is the figure you will put into

Retained Earnings.

Next, do the Cash Flow Statement. It's ending balance should equal

"Cash" in the Balance Sheet.

Scenarios 1 and 2 will have differences just as your entries in last week's assignment

had differences.

Don't forget to follow syllabus instructions regarding narrative to prepare and upload separately.

Balance Sheet
Cash
Accounts Receivable		0	Hint: No A/R because all Sales were in Cash
Inventory
Total Current Assets		#VALUE!
Fixed Assets
Total Assets		#VALUE!
Accounts Payable
Bank Loan
Total Liabilities		0
Owners Investment
Retained Earnings
Total Equity		#VALUE!
Total Liab & Equity		#VALUE!
Income Statement
Revenue
Less: CGS			(Cost of Goods Sold)
Gross Profit		#VALUE!
Wages
Rent
Income Before Int		#VALUE!
Interest Expense
Net Income		#VALUE!
Cash Flow Statement
Net Income			#VALUE!
Increase in Accounts Receivable			0	(Hint: No A/R so this line will be zero)
Increase in Inventory				(Hint: Will be a negative number)
Increase in A/P			0
Funds provided by operations			#VALUE!
Equipment Purchased
Funds used by Investments
Owners Investment
Bank Loan
Funds provided by financing			0
Net Increase in Cash for period			#VALUE!
Plus Beg Cash:			0
Ending Cash			#VALUE!

Here are the Numbers you need to use for the above formulas:

ASSUMPTIONS - Dog Stand West
1. Start business with $7,000 owner investment.
2. Borrow $20,000 from bank. Interest only loan @ 10% interest.
3. Buy $15,000 in equipment with cash
4. Buy $80,000 in dogs/buns inventory on credit
5. Buy $12,000 in condiments inventory for cash
6. $128,000 in Sales, all for cash
7. Other expenses: Rent $12,000, wages $20,800, interest expense $2,000.
8. At end of year, pay for $72,500 of the outstanding accounts payable
9. Year end inventory shows $2,500 in dog/bun inventory and $1,000 in
condiment inventory.
Cash			Accounts Payable			Sales
7,000	15,000			80,000			128,000
20,000	12,000		72,500
128,000	12,000
	20,800			7,500		Dogs/Buns Expense
	2,000					77,500
	72,500
20,700
Dog/Bun Inventory			Bank Loan
80,000	77,500			20,000		Condiments Expense
2,500						11,000
Condiment Inventory			Owners Investment
12,000	11,000			7,000		Wages Expense
1,000						20,800
Equipment
15,000						Rent Expense
						12,000
Assets, Expenses: left side is plus, right is minus						Interest Expense
Liab, Equity, Revenues: right side is plus, left side is minus						2,000