Assume an accounting period of 1 week. You start an ice cream business and this is what you do in your first week (all of the below occurs during week 1): You invest $30 in your ice cream selling business You get a $30 loan from the bank. You go to the grocery store to buy half-and-half, heavy cream, eggs, vanilla sugar, and vanilla extract. You buy enough to make 60 scoops. Your total cost is $30. You pay $20 in cash and S10 is charged to your account at the grocer. Your brother makes a batch of ice cream for 30 scoops and charges $1 for production labor (cash). You sell the 30 scoops at Sl each. You receive cash for 20 scoops and the other 10 scoops are purchased on account. You repay $10 of the bank loan. The banker charges you $2 in interest (cash). The neighbors where you have your ice cream stand ask you to buy an insurance policy. The insurance agent offers you a three-week policy which costs $6 payable in advance. You have to pay for the entire policy in cash now You purchase an ice cream stand for $12. You also buy a tiny patch of land from a friend's family for $3. You pay for the stand and the land with cash You depreciate the ice cream stand $1/week including during your first week of business. A customer pays $5 for four scoops she bought on account. Edit View Go Tools Windows Fancial Statements d e plage 1 of 3 ACCOUNTS RECEIVABLE NOTES PAYABLE INVENTORY RAW MATERIALS FINISHED GOODS TOTAL LIABILITIES PREPAID EXPENSE OWNER'S EQUITY ORIGINAL INVESTMENT FIXED ASSET RETAINED EARNINGS mm EARNINGS WEEK TO DATE TOTAL OWNER'S EQUITY TOTAL LIABILITIES + OWNER'S EQUITY TOTAL ASSETS OPERATING CASH FLOW COLLECTIONS Tools Window Help B 59PMQ QE Financial Statements Editable of page 2 of 31 OPERATING LASH FLOW COLLECTIONS INVENTORY PAID SG'A PAID INTEREST PAID TAXES PAID TOTAL OPERATING CASH FLOW - - - INVESTING CASH FLOW FIXED ASSET INVESTMENT $ DIVESTMENT OTHER.INVESTMENTS TOTAL INVESTING CASH FLOW ------- w Go Tools Window Help 510 PM Financial Statement table.pdage 2013 FINANCING CASH FLOW PAID IN/PAID OUT (e.g. Stock issued) DIVIDENDS BORROW/PAYBACK TOTAL FINANCING CASH FLOW -------- BEGINNING CASH NET CHANGE IN CASH ENDING CASH Begin: Monday AM End Sunday PM INCOME STATEMENT SALES Beginning inventory $ JI o Tools Window Help Financial S t ate 30 31 Begin: Monday AM. End: Sunday PM INCOME STATEMENT SALES Beginning inventory +Purchases +Labor Total available for sale -Ending inventory -COST OF GOODS SOLD GROSS PROFIT = EXPENSES - TOTAL EXPENSES NET PROFIT Pi
