In October, with $1,500 cash in hand, the Wilsons paid an attorney friend $250 to help them form Freshly Frozen Pizzas (FFP) as a limited liability corporation. Their first customer was the preschool at their church. The Wilsons spent $50 to design and copy a flyer featuring one of two Freshly Frozen Pizzas varieties cheese or pepperoni - at a sales price of $12 each. The charge from FFP to the preschool would be $6 per pizza. Preschool families were given one week to complete their orders. At the end of the sales period, preschool families had ordered 96 pizzas: 52 cheese pizzas and 44 cheese and pepperoni combo pizzas.

Working out of their home kitchen, it took the Wilsons a week to make enough pizzas to fill the orders (and a $480 new chest freezer they put on their credit card; theyll pay it off next month). They spent $115 for dough and sauce ingredients, $120 for cheese, $55 for the pepperoni, and an additional $20 for packaging supplies. They delivered the frozen pizzas to the preschool at a scheduled pickup time. Rather than trying to collect payment from each family, the preschool agreed to charge each familys monthly tuition statement for their pizzas and would cut a check to Freshly Frozen Pizzas for the total due during the first week of November.

Part 1 Assignment Use an Excel worksheets to complete the following:

1. First month T-Accounts transactions

   • The equipment will depreciate straight line over 60 months

   • Assume there was no inventory remaining at month end

2. First month Income Statement

3. First month Balance Sheet

4. First month Statement of Cash Flows