Jeremy Slacker started the Del Fuego Surf Shop on January 1 after determining that business school classes conflicted with his preferred activity. He invested $90,000 in the shop-$109,000 of his own savings and $45,000 borrowed from an acquaintance. The loan is to be repeld in 5 years. Jeremy will pay the lender annual interest at a rate of 8 percent. Shortly after opening, Jeremy realized that he is not the best financial planner and has come to you for help. With some prodding, you are able to establish that Jeremy plans to sell only two models of surfboard, the Zuma and the Coronado, for at least the first year. Data on the boards are given as follows. Coronado 720 1,440 Expected smal sales units) Retail price (per unit) Purchase coat (pers) $850 $ 550 450 100 Additional information on the planned operations for the year includes the following 1. Equipment costing $80,000 was purchased for cash when the store opened. The equipment will be depreciated over five years using straight-line depreciation 2. Because of the fantastic weather in Del Fuego, Jeremy expects sales to occur uniformly over the year Sales will be both for cash (60 percent) and on account (40 percent). Sales on account are assumed to be collected in two months 3 my will maintain Inventory equal to one-half of a month's sales All boards will be purchased from the manufacturer on credit with payment made one month after purchase 4. Annual cash selling general, and administrative expenses are $14,600 fixed plus 10 percent of revences 5. Jeremy's tax rate is 40 percent Problem 13-63 (Algo) Budgeted Financial Statements in a Retail Firm (LO 13-6, 7) Required: a. Prepare an income statement for the year based on the date and assumptions available b. Prepare the year-end (December 31) balance sheet based on the data and assumptions available, Complete this question by entering your answers in the tabs below. Required Required Prepare an income statement for the year based on the data and assumptions available Required: a. Prepare an income statement for the year based on the data and assumptions available. b. Prepare the year-end (December 31) balance sheet based on the data and assumptions available, Complete this question by entering your answers in the tabs below. Required A Required B Prepare an income statement for the year based on the data and assumptions available. Del Fuego Surf Shop Budgeted Income Statement For the Year Zuma Coronado Total Less other costs: Required A Required B > Required: a. Prepare an income statement for the year based on the data and assumptions available. b. Prepare the year-end (December 31) balance sheet based on the data and assumptions available. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the year-end (December 31) balance sheet based on the data and assumptions available. Del Fuego Surf Shop Budgeted Balance Sheet December 31 Assets Current assets Total assets Liabilities and Net Worth Total liabilities Total net worth Total liabilities and net worth Required: a. Prepare an income statement for the year based on the data and assumptions available. b. Prepare the year-end (December 31) balance sheet based on the data and assumptions available. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the year-end (December 31) balance sheet based on the data and assumptions available. Del Fuego Surf Shop Budgeted Balance Sheet December 31 Assets $ 0 Current assets 0 $ 0 Total assets Liabilities and Net Worth 0 Total liabilities 0 Total net worth Total liabilities and net worth 0 DE Next
