Freshly Frozen Pizzas Balance Sheet 10/31/XX Assets Debit Credit Cash.. 890 Accounts Recievable. 576 Inventories. 0 Capital Equipment. 480 Less: Accumulated Depreciation 8 472 Total Assets. $ 1,938 Liabilities & Stockholder's Equity Liabilities: Accounts Payable. 480 Total Liabilities. 480 Stockholders's Equity: Capital Stock/Equity. 1,500 Retained Earnings.. -42 Total Stockholder's Equity. 1,458 Total Liabilities and Stockholders' Equity.. $ 1,938Revenues increase on right Income Statement Income Statement Expenses Increase Costs of Good Sold increase on left Revenue Expenses Sales Cost of Goods Sold Net income Impact General & Administrative Sales & Marketing Depreciation Exp 576 310 310 576 250 50 8 250 50 8 250 0 50 0 8 0 0 576 310 0 250 50 8 576 310 Other Expenses Interest Income/Exp Income Tax Exp 618 576 42 Carries over to Retained Earnings 0 0 0 0 0 0 On Balance Sheet 0 0 0Freshly Frozen Pizzas Income Statement For the month ended 10/31/XX Revenue: Debit Credit Sales.. 576 Cost of Goods Sold. -310 Gross Profit.. 266 Expenses: General/Administrative Expense. 250 Sales/Marketing Expense. 50 50 Depreciation Expense.. 8 308 Income before income taxes 42 Income taxes. 0 Net income (loss) $ 42)Freshly Frozen Pizzas Statement of Cash Flows For the month ended 10/31/XX Cash flow from operating activties: Cash used by operations.. -610 Net cash provided by operating activties. -610 Cash flow from investing activties: Cash used by investing. 0 Net cash provided by investing activties.. 0 Cash flow from financing activties: 1 Proceeds from issuing capital stock.......mmmmmmmmmIII 1500 2 Net cash provided by financing activties........... 1500 Net increase in cash......mmmmmm 890 4 Cash and cash equivalents, 10/1/XX. 0 5 Cash and cash equivalents, 10/31/XX. 890Part 2: Expansion and Second Month of Business Deciding the pizza business would soon take over their home kitchen, the Wilsons signed a lease for a 400 square foot space at an annual gross lease cost of $18 per square foot. (Gross lease cost means the rent includes all utilities, insurance, property taxes, etc.) The previous tenant, a gelato maker, had left its installed commercial freezer/refrigerator, and the space was already equipped with ample counter space for assembling pizzas. Freshly Frozen Pizzas could move into the space immediately; the first lease payment is due December 1. In the first week of November, the Wilsons spent $75 fine-tuning their pizza fundraiser flyers and distributing the flyers to two high school band departments, an elementary school PTA, and their church youth group. They would keep the prices the same as for the preschool fundraiser - Freshly Frozen Pizzas would charge $6 per pizza, and the sponsor would charge $12 per pizza. All four groups enthusiastically agreed to sponsor a pizza fundraiser. The church youth group was ready to start immediately; they wanted the pizzas ready to deliver by Thanksgiving. The two band departments and the PTA wanted to distribute the flyers in November, and accept delivery of the pizzas during the second week of December. In all cases, Freshly Frozen Pizzas would not collect payment from individual pizza customers, but the company would be paid by the fundraising sponsor (band, PTA, youth group, etc.) in the subsequent month after the pizzas are delivered. Next, the Wilsons secured a wholesale supplier for the pizza ingredients and packaging supplies. Freshly Frozen Pizzas would save about 25 percent by purchasing supplies in volume, driving down the average cost per pizza to $2.25. The wholesale supplier required payment at the time of supply delivery. Because Freshly Frozen Pizzas delivers its products frozen, the Wilsons decided to stock up on inventory by making and freezing pizzas in advance so that they could readily fill upcoming orders. In November, they spent $675 on pizza supplies, enough to make 300 pizzas (160 cheese, 140 pepperoni). The church youth group had orders for 128 pizzas (68 cheese and 60 pepperoni). Freshly Frozen Pizzas delivered the frozen pizzas by the desired date. On November 10, Freshly Frozen Pizza received payment in full from their first customer (the preschool fundraiser from the previous month).Part 2 Assignment Use the accompanying Excel worksheets to complete the following: a. Second month T-Accounts transactions The freezer purchased in the first month will continue to depreciate . FFP paid off the credit card bill from the previous month There is inventory remaining at month end b. Second month Income Statement c. Second month Balance Sheet d. Second month Statement of Cash Flows Part 3: Third Month of Business The first week in December, Band A ordered 79 pizzas (35 cheese, 44 pepperoni), while Band B ordered 91 pizzas (55 cheese and 36 pepperoni). The Wilsons filled the orders from their inventory and delivered the pizzas on December 14. On December 16, the Wilsons received payment from the youth group fundraiser. On December 18, with their inventory almost depleted and not wanting to have to make pizzas over Christmas, the Wilsons decided to restock and spent $450 on pizza supplies, enough for 200 pizzas, (107 cheese, 93 pepperoni). On December 25, Sandy's parents gave the Wilson's a $200 short term loan. On December 29, the PTA group placed an order for 86 pizzas (40 cheese, 46 pepperoni)