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1. Use the following to build the 2019 I/S and the B/S at both 1/1/2019 and 12/31/2019: (a) Before January 1, 2019 the following occur:
1. Use the following to build the 2019 I/S and the B/S at both 1/1/2019 and 12/31/2019: (a) Before January 1, 2019 the following occur: i. You enter the lemonade stand business. In order to buy all the required equipment and supplies to get started, you estimate that you will need $50k, plus an extra $100k for cushion. Fiscal year end is set as 12/31/2019. ii. You open up a business checking account into which you put $100k of your own money. You incorporated and issued yourself, the sole shareholder, 5,000 shares. iii. In addition, you borrow $50k from the bank at a 10% annual interest rate. iv. You buy $20k worth of lemons and paper cups (just enough to make 100k cups of lemonade). You also buy a lemon squeezer for $15k and a lemonade stand for $15k. You buy a cash register for $2k. v. You estimate that the lemon squeezer and lemonade stand will have useful lives of 3 years, while the cash register will be 5 years. At the end of their useful lives, assume they will be obsolete and be thrown away (assume straight-line depreciation). (b) During fiscal year 2019 the following occur: i. You operate the business for a year and sell 100k cups of lemonade for $1 each. il. You hired a lemonade mixer and paid her $15k for the year iii. In addition, you also hired a cashier to ring people up and paid him $15k for the year. iv. Tax rate for the lemonade stand business is 21%
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