I needed help understanding what goes into the notes. This is what the professor wants us to do: II. Notes to the Financial Statements: Your notes must contain the following: A. Appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory. Below I have attached the Pro Forma Income Statement and Balance Sheet:

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Second Location

Pro Forma Income Statement

For Year Ending 12/31/2018

Bakery Sales$261,858.04

Merchandise Sales$964.49

Total Revenues$262,822.53

Cost of Goods Sold - Baked$84,667.43

Cost of Goods Sold - Merchandise$687.82

Total Cost of Goods Sold$85,355.25

Gross Profit$177,467.28

Operating Expenses:

Rent Expense$18,000.00

Wages Expense$75,000.00

Misc. Supplies Expense$2,400.37

Business License Expense$1,636.62

Misc. Expense$1,091.07

Depreciation Expense$2,142.86

Insurance Expense$872.86

Advertising Expense$1,239.79

Interest Expense$654.63

Telephone Expense$392.78

Total Operating Expenses:$103,430.98

Net Income$74,036.30

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Second Location

Pro Forma Balance Sheet

As of December 31, 2018

Assets Liabilities and Owners' Equity

Current Assets: Current Liabilities:

Cash $7,000.00 Accounts Payable $20,622.11

Accounts Receivable $65,705.63 Wages Payable $2,706.62

Baking Supplies $28,222.48 Interest Payable $169.17

Merchandise Inventory $229.27

Prepaid Rent $1,691.64

Prepaid Insurance $1,691.64

Misc. Supplies $136.39

Total Current Assets $104,677.06 Total Current Liabilities$23,497.90

Long Term Liabilities:

Long Term/Fixed Assets: Notes Payable$20,000.00

Baking Equipment $15,000.00 Total Long Term Liabilities:$20,000.00Accumulated Depreciation -$2,142.86

Net Fixed assets$12,857.14 Total Liabilities:$43,497.90

Common Stock

Retained Earnings$74,036.30

Total Equity$74,036.30

Total Assets:$117,534.20 Total Liabilities & Equity$117,534.20