Nicole Mackisey is thinking of forming her own spa business, Nicole\'s Getaway S
ID: 2501871 • Letter: N
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.
References
Section BreakCC1-1 Financial Statements for a Business Plan [LO 1-2, LO 1-3]
1.
value:
0.50 points
Required information
CC1-1 Part 1
Based on Nicole's estimates, prepare a (forecasted) income statement for Nicole's Getaway Spa for the year ended December 31, 2015.
References
eBook & Resources
Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.
CC1-1 Part 1Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.
Check my work
2.
value:
0.50 points
Required information
CC1-1 Part 2
Prepare a (forecasted) statement of retained earnings for Nicole's Getaway Spa for the year ended December 31, 2015.
References
eBook & Resources
Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.
CC1-1 Part 2Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.
Check my work
3.
value:
0.50 points
Required information
CC1-1 Part 3
References
eBook & Resources
Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.
CC1-1 Part 3Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.
Check my work
4.
value:
0.50 points
Required information
CC1-1 Part 4
As of December 31, 2015, would most of the financing for assets come from creditors or stockholders?
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.
Explanation / Answer
Answer for question no.1:
Answer for question no.2:
Answer for question no.3:
Answer for question no.4:
Most of the financing for assets come from creditors, as, from the above table total of creditors is more than total shareholders funds.
Forecasted income statement Particulars Amount Sales revenues $40,000.00 Minus Wages $24,000.00 Cost of supplies $7,000.00 Office expenses $5,000.00 Total expenses $36,000.00 Profit before taxes $4,000.00 Minus: Income taxes $1,600.00 Profit after tax $2,400.00Related Questions
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