Julie Thompson opened up her small business at the beginning of the year. She's in the business of selling hair products. To start her company, she invested $40,000 from her savings account. She also borrowed $20,000 during the year, and paid $2,000 interest on this loan. She also purchased a vehicle at the beginning of the year for company use, paying $10,000 with cash. Julie also has one employee. During the year, she kept track of the following information:

1. She sold $120,000 if hair products and collected $90,000 from customers during the year, but $30,000 is still owed to her on 12/31

2. She paid rent for all 12 months totaling $24,000, but also prepaid for January rent of the following year totaling $2,000.

3. The cost of her hair products total $45,000 and all but $5,000 were sold during the year.

4. Employee wages paid during the year came to $22,000 but wages for the last week of December (which is $1,000) has not yet been paid.

5. Utilities paid during the year totals $3600, but December's bill has not arrived but its anticipated to be $300.

Assuming she uses accrual-based accounting, answer the following questions:

1. What is the cost of goods sold on her hair products?

2. What is the book value on the vehicle at the end of the first year, assuming she uses straight-line depreciation?

3. Where would you see the $5,000 of unsold products? Which financial statement and which account classification would it be listed under?

4. Where would you see the loan of $20,000 listed? Which financial statement and account classification?

5. Ignoring income taxes, did she make a profit or loss during this first year?

6. She expects to use the company car for 4 years at which time, she believes she can sell it for about $2,000.

7. Where would you see her investment of $40,000 listed?

8. Where would you see the amount of rent she prepaid for the following year? Which statement and which account?

9. Would you pick up the interest on the loan on the income statement? Why or why not?

10. What would the book value of the vehicle be at the end of the 4 year period?