Buster Brown just opened his own business as a sole proprietorship. During his first month in business, he recorded the following transactions:

• He purchased $50,000 of equipment, putting 15% down and borrowing the remainder.
• He was able to sell 1,000 units of product at an average price of $45 each. Half of the sales were on credit, none of which had been paid as of the end of the month.
• Cost of goods sold came to $21,000 and are related to the above sales.
• $36,000 worth of inventory was purchased in cash.
• All other expenses (including the interest from the loan) of $5,000, were paid in cash.
• Buster's personal tax rate is 34%. (You remembered that in sole proprietorships, income is paid at the individuals level). Taxes will be paid in a subsequent period.)

1. Write out an Income Statement and fill in the two blanks below. Do not include $ signs on your answers. Add commas to all values that are in the thousands. 21000 would be written 21,000.
   1. The Gross Margin amount is
   2. The Net Income amount is :

2. What are the flows of cash in and out of the business during the month. Show inflows as positives and outflows as negatives (using - sign). Sum these values to arrive at a "Net Cash Flow" figure. Do not write the $ sign for your answers Add commas, to all your answers.

Cash Flows

Purchase of Equipment: $

Proceeds from the Loan (hint: 15% was paid in cash) $

Proceeds from Sales:$

Purchase of Inventory:$

Other Expenses: $

Net Cash Flow (cash available to the company): $: