Initial set up on December 31, 2020:

Coffee shop Cozy Corner: $70,000 in personal funds (10,000 shares issued), $30,000 in loan at 10% interest rate.

Purchase equipment, tables, and chairs for $20,000 with a useful life of 4 years. Purchase inventory for $20,000 in cash.

Question: What does the opening BS look like? (10 points)

During the fiscal year ended December 31, 2021:

Sell $120,000 worth of coffee but have collected $100,000 in cash. Customers still owe you $20,000.

Use up all of the existing inventory for the sales.

Purchase additional inventory of $35,000 ($30,000 in cash, $5,000 in credit)

Hire a cashier and a barista for 40,000 total.

Pay rent of 10,000 for the year

Take depreciation expense

Pay interest expense on the loan

Pay taxes at 25% of taxable income

Purchase $10,000 in additional equipment. No depreciation taken on this equipment during 2020.

Question: Build the three financial statements for fiscal year 2021 (Income statement: 10 points, Cash flow statement: 10 points, Balance sheet: 10 points)