I did question 1 (last photo). I need help with number 2. I incorporated the 1st year of operation info into each financial statement, but im not sure what to do with the data from march.

statements as part of any loan application. In addition, they anticipated that their future business prospects would be better if they formed a company that could function as a parent company for their current restaurant and any future restaurants that they might open. With this decision made, they began the long and onerous process of setting up their restaurant. As a result, in March 2022, they formed Seafood Cuisine, Inc. by contributing $11,000 in cash in exchange for all of the company's 1,100 shares of stock. Sophia convinced her father to loan the new venture $150,000 in cash, with principal payable at the rate of $15,000 per year over ten years and interest payable at a rate of 5.5% on the outstanding balance as of the beginning of the loan's year. The loan agreement was signed on March 31, 2022, and provided that both principal and interest would be paid only once a year beginning on March 31, 2023. During March, the girls searched for an appropriate location for the new restaurant. Mackenzie negotiated a lease agreement for approximately 2,000 square feet of retail space at a rate of $1,200 per month. The agreement ran for six years, with an option to renew for five more years. The landlord agreed to give the girls two months of free rent on the front end of the lease in order to help the new business survive the critical start-up period. In addition, Sophia arranged to buy a commercial refrigerator, range, and grill for $30,000 in cash, delivered and installed on March 31. This equipment was expected to last five years (per seller's assessment). Mackenzie and Sophia also purchased computer hardware with restaurant-specific software already installed, at a cost of $15,000 cash. The girls plan to depreciate this equipment over six years. Other cash purchases included: This equipment was expected to have a useful life of three years. This equipment was expected to have a useful life of three years. With a desire to have the new restaurant to be fully operational by April 1 , Mackenzie and Sophia requested that their landlord allow their carpenter, electrician, painters, and plumbers to begin renovations to the leased location on March 30 and 31 . The workers completed the necessary renovations and improvements at a cost of $68,000 in cash. Improvements and renovations would be depreciated over five years. The purchased kitchen equipment was delivered on March 31 and Juneau's Seafood Kitchen opened on April 1, 2022. First year of operations Although Mackenzie and Sophia had prepared their business tax return in April 2022 (for 2021 income taxes), they had not prepared a full set of financial statements using the accrual method of accounting. Nevertheless, they kept all the necessary information in a spreadsheet, and Sophia was able to compile these cash flows and relevant accrual information by each income statement account into a columnar form, as follows: EXPENSES Food costs $60,000 Once a week, Mackenzie sat down to write checks to pay bills. By year-end, only one week of food costs remained unpaid, totaling $9,000 Supply costs These costs included miscellaneous items such as napkins and ice. The items were generally paid out of petty cash. Utilities At the end of the year, one month of electricity, telephone, and water remained unpaid. Employee wages These costs were kept fairly low. Mackenzie was an extraordinary baker and Sophia was an excellent chef. For the simpler work, they only hire college students. At the end of the year, one week of wages ($1,400) remained due. Licenses The "new business license" fee was paid early morning on April 1 , 2022. This payment allowed the restaurant to begin operations immediately. Insurance $18,000 A comprehensive insurance policy was purchased on April 1 , 2022. The policy covered loss due to theft, fire, or storm damage. The policy also covered business-related risks such as lawsuits arising from customer injury while on the restaurant premises. This policy covers three years. Income taxes The girls agreed to assume that income taxes would be paid on April 15, at a rate of 15%. Owner compensation The giris treated the amount they withdrew for personal use as dividends. Depreciation Depreciation expense for all assets placed in service begins with the first full month of operation (e.g. nine months for those assets placed in service during 2022) 2. Prepare an Income Statement, Balance Sheet, Statement of Stockholders' Equity, Statement of Cash Flows for Seafood Cuisine Inc. as of December 31 , 2022 3 March 31, 2022 Assots Current Assets: 9 Noncurrent \begin{tabular}{|c|r|r|} \hline & Assets: \\ \hline 10 & Refrigerator & $30,000 \\ \hline 11 & ComputerSoftware & $15,000 \\ \hline 12 & Equipment & $1,800 \\ \hline 13 & FurnitureandFixtures \\ \hline 14 & ImprovementsandRenovation & $2,700 \\ \hline 15 & & $68,000 \\ \hline \end{tabular} Liabilities 8 Stockholder's Equity Noncurrent Liabilities: Interest 8 Dividends Payable Stockholders Equity: Common Stock $11,000 Total Stockholders Equity $11,000 Total Liabilities \& Stockholders Equity $161,000 statements as part of any loan application. In addition, they anticipated that their future business prospects would be better if they formed a company that could function as a parent company for their current restaurant and any future restaurants that they might open. With this decision made, they began the long and onerous process of setting up their restaurant. As a result, in March 2022, they formed Seafood Cuisine, Inc. by contributing $11,000 in cash in exchange for all of the company's 1,100 shares of stock. Sophia convinced her father to loan the new venture $150,000 in cash, with principal payable at the rate of $15,000 per year over ten years and interest payable at a rate of 5.5% on the outstanding balance as of the beginning of the loan's year. The loan agreement was signed on March 31, 2022, and provided that both principal and interest would be paid only once a year beginning on March 31, 2023. During March, the girls searched for an appropriate location for the new restaurant. Mackenzie negotiated a lease agreement for approximately 2,000 square feet of retail space at a rate of $1,200 per month. The agreement ran for six years, with an option to renew for five more years. The landlord agreed to give the girls two months of free rent on the front end of the lease in order to help the new business survive the critical start-up period. In addition, Sophia arranged to buy a commercial refrigerator, range, and grill for $30,000 in cash, delivered and installed on March 31. This equipment was expected to last five years (per seller's assessment). Mackenzie and Sophia also purchased computer hardware with restaurant-specific software already installed, at a cost of $15,000 cash. The girls plan to depreciate this equipment over six years. Other cash purchases included: This equipment was expected to have a useful life of three years. This equipment was expected to have a useful life of three years. With a desire to have the new restaurant to be fully operational by April 1 , Mackenzie and Sophia requested that their landlord allow their carpenter, electrician, painters, and plumbers to begin renovations to the leased location on March 30 and 31 . The workers completed the necessary renovations and improvements at a cost of $68,000 in cash. Improvements and renovations would be depreciated over five years. The purchased kitchen equipment was delivered on March 31 and Juneau's Seafood Kitchen opened on April 1, 2022. First year of operations Although Mackenzie and Sophia had prepared their business tax return in April 2022 (for 2021 income taxes), they had not prepared a full set of financial statements using the accrual method of accounting. Nevertheless, they kept all the necessary information in a spreadsheet, and Sophia was able to compile these cash flows and relevant accrual information by each income statement account into a columnar form, as follows: EXPENSES Food costs $60,000 Once a week, Mackenzie sat down to write checks to pay bills. By year-end, only one week of food costs remained unpaid, totaling $9,000 Supply costs These costs included miscellaneous items such as napkins and ice. The items were generally paid out of petty cash. Utilities At the end of the year, one month of electricity, telephone, and water remained unpaid. Employee wages These costs were kept fairly low. Mackenzie was an extraordinary baker and Sophia was an excellent chef. For the simpler work, they only hire college students. At the end of the year, one week of wages ($1,400) remained due. Licenses The "new business license" fee was paid early morning on April 1 , 2022. This payment allowed the restaurant to begin operations immediately. Insurance $18,000 A comprehensive insurance policy was purchased on April 1 , 2022. The policy covered loss due to theft, fire, or storm damage. The policy also covered business-related risks such as lawsuits arising from customer injury while on the restaurant premises. This policy covers three years. Income taxes The girls agreed to assume that income taxes would be paid on April 15, at a rate of 15%. Owner compensation The giris treated the amount they withdrew for personal use as dividends. Depreciation Depreciation expense for all assets placed in service begins with the first full month of operation (e.g. nine months for those assets placed in service during 2022) 2. Prepare an Income Statement, Balance Sheet, Statement of Stockholders' Equity, Statement of Cash Flows for Seafood Cuisine Inc. as of December 31 , 2022 3 March 31, 2022 Assots Current Assets: 9 Noncurrent \begin{tabular}{|c|r|r|} \hline & Assets: \\ \hline 10 & Refrigerator & $30,000 \\ \hline 11 & ComputerSoftware & $15,000 \\ \hline 12 & Equipment & $1,800 \\ \hline 13 & FurnitureandFixtures \\ \hline 14 & ImprovementsandRenovation & $2,700 \\ \hline 15 & & $68,000 \\ \hline \end{tabular} Liabilities 8 Stockholder's Equity Noncurrent Liabilities: Interest 8 Dividends Payable Stockholders Equity: Common Stock $11,000 Total Stockholders Equity $11,000 Total Liabilities \& Stockholders Equity $161,000