Day Care example of the build of an income statement and balance sheet We are starting day care center Here are the transactions 1. Start the business With $20,000 of your own cash and $30,000 Home Equity Loan 2. Buy chairs, tables, desks, Whiteboards and recreation equipment for $25,000, pay with credit. 3. Operate month one a. Buy $3,000 of paint, brushes, markers, cleaning supplies and snacks, pay with cash b. Provide $5,000 worth of daycare. Half of your customers paid cash, half on 30 day credit. c. Tax Rate is 30% 4. Operate month 2 a. Pay $1,100 for monthly payment on Home equity loan (1,000 principle, 100 interest) b. Buy $3,500 of advertising on credit c. Collect all month one receivables d. Provide $6,000 worth of day care, half of your customers paid cash, half on 30 day credit. 5. Use the methods demonstrated in class. Prepare the income statement for the 2 months and the balance sheet at the end of 2 months