Financial Statement Project: Montana Furniture Design part 3 Question 7

1 / 5 100% + a Use the attached financial statements to answer the following questions. Please be sure to read and adhere to the additional guidance listed on the following page. Thi 7. You'll notice that payroll costs went up in 2020 compared to 2019. Were the additional employees hired office staff or production staff or both? If I told you there were no new employees during 2020, what would this mean in regard to the increase in payroll costs? If you're thinking about investing in this business, is it a good thing or a bad thing that no new employees were hired over the course of 20202 Why or why not? Montana Furniture Design Profit and Loss January 2018 - December 2020 JAN - DEC 2018 $2,276,200.04 JAN - DEC 2019 $2,018,819.33 JAN - DEC 2020 $2,544,841.58 Income Cost of Goods Sold Cost of Goods Sold Labor & wages Materials Other costs Shipping Wholesale items Total Cost of Goods Sold GROSS PROFIT 535,388.50 358,432.78 17,572.46 120,88726 389,990.57 $1,402,271.84 $873,928.40 487,623.68 380,220.98 24,162.06 116,725.88 305,975.82 $1,314,708.22 $704,211.11 537,451.37 512,163.80 17,390.32 137,198.74 364.227.35 $1,568,431.58 $978,410.00 Expenses Charitable contributions Fees & subscriptions Marketing Meals and Entertainment Office expenses & Utilities Payroll expenses administration Property taxes Reference materials Repair & Maintenance Salaries & wages Supplies & small tools 27,181.75 13,944.88 14,803.36 1,301.94 8,186.70 5,491.70 2,353.90 40,520.26 12,856.21 28,861.30 700.52 22,029.10 42,285.00 16,440.78 30.472.93 1,926.62 19,368.75 1,027.64 2.479.04 49.95 17,400.04 250,031.63 5,719.65 9,733.46 225,835.42 5,568.83 2,408.13 1725 19,141.09 228,873.71 4,634.71 27,181.75 13,944.88 14,803.36 1,301.04 8,188.70 5,491.70 2,353.90 40,520-26 12,856.21 28,961.90 700.62 22,029.10 Expenses Charitable contributions Fees & subscriptions Marketing Meals and Entertainment Office expenses & Utilities Payroll expenses - administration Property taxes Reference materials Repair & Maintenance Salaries & wages Supplies & small tools Telephone & Internet Travel Total Expenses NET OPERATING INCOME Other Income Other Expenses NET OTHER INCOME 9,733.46 225,835.42 5,568.83 5,077.83 8,657.06 $328,236.83 $545,691.57 $56.08 $0.00 $56.06 $545,747.65 2,408.13 17.25 19,141.09 228,873.71 4,634.71 3,782.59 11,214.06 $374,938.92 $329,272.19 $52.15 $0.00 $52.15 $329,324.34 42.285.00 18,440.78 30.472.93 1,926.82 19,368.75 1,027.64 2,479.04 49.95 17,400.04 250,031.63 5,719.65 5,902.69 12,855.67 $406,980.39 $570,449.61 $171.00 $58.48 $112.52 $570,562.13 NET INCOME Montana Furniture Design Balance Sheet 2018 through 2020 JAN - DEC 2018 JAN - DEC 2019 JAN - DEC 2020 29,210.44 5.00 6,066.58 $36,282.02 75,266.59 5.27 0.00 $75,271.86 60,118.13 72,271.10 0.00 $132,389.23 ASSETS Current Assets Bank Accounts Checking Savings Petty Gash Total Bank Accounts Accounts Receivable Accounts Receivable Total Accounts Receivable Other Current Assets Total Current Assets Fixed Assets Accumulated depreciation Equipment Improvements Roof Building addition Total Fixed Assets 39,695.00 $39,695.00 $17,681.69 $92,658.71 37,890.29 $37,890.29 $0.00 $113,182.15 212,066.58 $212,066.58 $24.476.40 $388,83221 227,052.00 256,308,00 30,870,00 27.450.13 $87,576.13 $612,601.00 $792,835.84 239,224.00 262.447.00 5.300.40 30,870.00 27.450.13 $86,843.53 $588,791.00 $788,796.68 243,369.00 262,447.00 5,300,40 30,870.00 27.450.13 $82,698.53 $294,153.00 $745,783.74 Inventory TOTAL ASSETS LIABILITIES AND EQUITY Liabilities 256,308.00 30.870.00 27,450.13 $87,578.13 $612,801.00 $792,835.84 262,447.00 5,300.40 30,870.00 27,450.13 $88,843.69 $588,701.00 $788,796.68 202.447.00 5,300.40 30,870.00 27,450.13 $82,898.53 $294,153.00 $745,783.74 Equipment Improvements Root Building addition Total Fbced Assets Inventory TOTAL ASSETS LIABILITIES AND EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable Total Accounts Payable Credit Cards Line of Credit Total Current Uablittle Long-Term Liabilities Total Labildos Equity TOTAL LIABILITIES AND EQUITY 0.00 $0.00 $ 6,021.46 $60,000.00 $53,978.54 $0.00 $53,978.54 $738,857.30 $792,835.84 35,772.72 $35,772.72 $7,819.82 $0.00 $43,592.54 $0.00 $43,592.54 $745,204.14 $788,796.68 0.00 $0.00 $27,723.07 $0.00 $27,723.07 $112,170.40 $139,893.47 $605,890.27 $745,783.74