Glak Love Jewelry Design & Mfg. Revenues First Month of Operations: 10,000 units sold at $8 per unit. Second Month of Operations: 20,000 units sold. The first 10,000 at $8 per unit, and the second 10,000 at $7 per unit. Third Month of Operations: 40,000 units sold at $6 per unit. Cash Flow characteristics: Goods are shipped at the end of the month are paid to the Company at the end of the following month by the customer. Cost of Goods Sold is made up of three components: Direct Materials --$2 per unit Direct Labor---$3 per unit, renegotiated to $2 in the third month with new pricing Fixed Machinery and Mfg. machinery and space rental costs--$10,000 per month, $15,000 with new labor price in month 3 Cash flow characteristics: Mfg.is outsourced to a different organization and all costs are paid the next month following the month they are produced - Glak love receives trade credit from its subcontract manufacturer Operating Expenses: the remainder of the company's expenses includes the following: Salaries for office staff and the Owner are fixed at $120,000 per year or $10,000 per month. $50,000 of the total goes to the owner Advertising is a fixed rate contract with an internet services firm which provides the company with secure servers, web analytics and Search Engine Optimization services for $3000 per month. Office Rental is a fixed yearly rental contract for the administrative offices which costs the company $4500 per month. Insurance is a fixed rate contract for insurance on the plant property and equipment is $1000 per month. Cash flow characteristics: All operating expenses are paid during the month that they are incurred. Ownership and Taxation: The Company is owned by a single individual who is paid a salary of $50,000 per year. The Company is organized as an LLC and is taxed as a pass-through entity which means that the Owner is taxed on her combined salary and the pre- tax income of the business. Appendix Continued: First Month Second Month Opening Balance Sheet Cash Flow Balance Sheet Income Statement Balance Sheet Income Statement Cash Flow 75,000 Cash Accounts Receivable Revenues Direct materials Direct Labor 75,000 A Total Assets Accounts Payable Machinery rent Cost of Goods Sold Salary Advertising L Owners' Equity 75,000 Owners Capital Retained Earnings Office Rental Insurance Operating OE expenses Net Pre-tax Profit Total Owners Equity 75,000 Third Month Income Statement Balance Cash Flow Sheet Cash Accounts Receivable Total Assets Accounts Payable Revenues Direct materials Direct Labor Machinery A rent Cost of Goods Sold Salary Advertising Office Rental Insurance Operating OE expenses Net Pre-tax Profit Owners' Equity Owners Capital Retained Earnings Total Owners Equity Breakeven Income Statement Revenues Direct materials Direct Labor Mochi Machinery rent Cost of Goods Sold Salary Advertising Office Rental Insurance Operating expenses Net Pre-tax Profit Calculate for the Third Month: Current Assets Current Liabilities Current Ratio Owners' Equity Cost of Goods Sold Gross Profit Margin