3) Calculate the break-even quantity to achieve DRDs stated gross income/salary of $80,000 from the business (assume 80% of the sales take place via liqueur stores).

EXHIBIT 3: DEEP ROOTS DISTILLERY Unaudited Balance Sheet as at December 31 2014 $ Estimate 2015 $ 3,221 581 10,000 Assets Current Cash Investment tax credits receivable Government funding receivable Harmonized Sales Tax receivable Inventory Subtotal 7,045 16,341 27,188 12,000 38,000 60,000 18,500 17,432 872 5,000 50,492 5,000 83,500 Property and equipment Investment tax credits recoverable Federal excise tax deposit Total assets Liabilities Current Accounts payable and accrued liabilities Advances from (repayment to) Shareholder Subtotal Deficit less capital stock Deficit/surplus Capital stock Subtotal Total liabilities 5,417 65,437 70,854 5,800 35,462 41,262 (20,462) 100 (20,362) 50,492 42,138 100 42,238 83,500 Unaudited Statement of Income and Deficit for the Year Ended December 31 2014 $ 14,480 Estimate 2015 $ 53,000 24,819 16,341 8,478 6,002 10,500 40,000 (29,500) 82,500 Revenue Cost of goods sold Purchases Inventory - end of year Subtotal Gross profit 2014 41.5% Expenses Advertising Bank charges and interest Credit card commissions Depreciation Dues and fees Office Product development Professional fees Rent Repairs and maintenance Small tools and supplies Training Travel Subtotal Net gain (loss) for the year Gain (deficit) beginning of year Gain (deficit) end of year 2,996 205 151 3,783 1,044 251 3,582 1,780 6,000 927 1,457 250 398 22,824 (16,822) (3,640) (20,462) 1,000 200 150 4,000 1,000 500 2,000 500 6,000 1,000 2,000 50 1,500 19,900 62,600 (20,462) 42,138 EXHIBIT 3: DEEP ROOTS DISTILLERY Unaudited Balance Sheet as at December 31 2014 $ Estimate 2015 $ 3,221 581 10,000 Assets Current Cash Investment tax credits receivable Government funding receivable Harmonized Sales Tax receivable Inventory Subtotal 7,045 16,341 27,188 12,000 38,000 60,000 18,500 17,432 872 5,000 50,492 5,000 83,500 Property and equipment Investment tax credits recoverable Federal excise tax deposit Total assets Liabilities Current Accounts payable and accrued liabilities Advances from (repayment to) Shareholder Subtotal Deficit less capital stock Deficit/surplus Capital stock Subtotal Total liabilities 5,417 65,437 70,854 5,800 35,462 41,262 (20,462) 100 (20,362) 50,492 42,138 100 42,238 83,500 Unaudited Statement of Income and Deficit for the Year Ended December 31 2014 $ 14,480 Estimate 2015 $ 53,000 24,819 16,341 8,478 6,002 10,500 40,000 (29,500) 82,500 Revenue Cost of goods sold Purchases Inventory - end of year Subtotal Gross profit 2014 41.5% Expenses Advertising Bank charges and interest Credit card commissions Depreciation Dues and fees Office Product development Professional fees Rent Repairs and maintenance Small tools and supplies Training Travel Subtotal Net gain (loss) for the year Gain (deficit) beginning of year Gain (deficit) end of year 2,996 205 151 3,783 1,044 251 3,582 1,780 6,000 927 1,457 250 398 22,824 (16,822) (3,640) (20,462) 1,000 200 150 4,000 1,000 500 2,000 500 6,000 1,000 2,000 50 1,500 19,900 62,600 (20,462) 42,138