- Complete the P&L Statement, Balance Sheet, and Statement of Cash Flows based on the provided assumptions.
- Use formulas for every value in each cell of all the financial statements.
Instructions Based on assumptions below, make a projected P&L, balance sheet and statement of cash flows for 3 months. After completing the projected financial statements, answer the questions below the balance sheet. Rick's Razor's Assumptions January razor sales in units 2,000 Days Receivable based on current month's sales Sale price of razor $4.00 Days Inventory based on next month's COGS January Razor blade sales (packs of 5) in units 2,000 Days Payable based on current months general expenses (Mkt and Other) Sale price of razor blade $2.00 Equipment Life in months Monthly unit sales growth rate for razors and Blades 1% Razor cost of goods sold per unit $2.15 Razor blade cost of goods sold per unit $0.89 Marketing expense as a % of current month's sales 15% Other expenses $1,500 8 Note: divide by 30 when calculating 20 Note: divide by 30 when calculating 15 Note: divide by 30 when calculating 60 Activity: 1 - In December Rick plans to open a bank account with his personal investment of $7,000 cash. 2 - In January Rick plans to open his doors for business. 3 - In January Rick plans to borrow $5,000 and buy $5,000 of equipment. 4. In March, Rick plans to buy S2,000 of additional equipment with cash. Jan Feb Mar Apr Units sold - razors - Units sold - razor blades Note: Don't Worry about rounding units sold of razors or blades P&L Statement Razor sales Razor blade sales Total Sales Razor cost of goods sold Razor blade cost of goods sold Total Cost of Goods Sold Gross Profit Note: you will need to determine April's COGS so you can calculate March's Inventory Expenses Marketing Expenses Other expenses Depreciation Total Expenses Net Income 117 Check figures: Before changes in the assumptions, Net Income for Jan. is $2537 and March is $2586 Statement of Cash Flows Operating Activities Net Income Changes in Cur. Assets and Liabilites Change in Accounts Receivable Change in Inventory Change in Accounts Payable Non-cash expenses Depreciation Cash fllow from Operating Activities Investing Activities Change in Equipment Cash fllow from Investing Activities Financing Activities Change in Notes Payable Change in Capital Cash fllow from Financing Activities Net increase in cash Cash--beginning of period Cash--end of period 7000 Balance Sheet Assets Cash Accounts Receivable Inventory Equipment Less: Accumulated Depreciation Total Assets Liabilities Accounts Payable Notes Payable Total Liabilities 7000 Owner's Equity Capital Invested Retained Earnings Total Owner's Equity Total Liabilities and Owner's Equity Check Figure: Before changing the assumptions, total Liabilities and OE for Jan. is $16187 and Mar. is $21369
