CON 1-1 Financial Statements for a New Business Plan LO1-1 [The following information applies to the questions displayed below.] Penny Cassidy is considering forming her own pool service and supply company, Penny's Pool Service & Supply, Inc. (PPSS). She has decided to incorporate the business to limit her legal liability. She expects to invest $20,000 of her own savings and receive 1,000 shares of common stock. Her plan for the first year of operations forecasts the following amounts at the end of the year December 31, current year: Cash in bank, $2,900; amounts due from customers for services rendered, $2,300; pool supplies inventory, $4,600; equipment, $28,000; amounts owed to Pool Corporation, Inc., a pool supply wholesaler, $3,500; note payable to the bank, $5,000. Penny forecasts first year sales of $60,000, wages of $24,000, cost of supplies used $8,200, other administrative expenses $4,500, and income tax expense of $4,000. She expects to pay herself a $10,000 dividend as the sole stockholder of the company. If Penny's estimates are correct, what would the following first year financial statements look like for Penny's Pool Service & Supply? CON1-1 Part 1 Required: 1. Prepare a summarized income statement for the current year. PENNY'S POOL SERVICE & SUPPLY Income Statement Revenues Total revenues Expenses Total expenses CON1-1 Part 2 2. Prepare a statement of stockholders' equity for the current year. PENNY'S POOL SERVICE & SUPPLY Statement of Stockholders' Equity Common Retained Stock Earnings $ 20,000 $ 0 Balance December 1, Current Year Balance December 31, Current Year $ 20,000 $ 1,300 CON1-1 Part 3 3. Prepare a balance sheet for the current year. PENNY'S POOL SERVICE & SUPPLY Balance Sheet Assets: Total assets Liabilities: Total liabilities Stockholders' Equity: Total stockholders' equity Total liabilities and stockholders' equity