Nicole Mackisey is thinking of forming her own spa business, Nicoles Getaway Spa (NGS). Nicole expects that she and two family members will each contribute $10,000 to the business and receive 1,000 shares each. Nicole forecasts the following amounts for the first year of operations, ending December 31, 2013: Cash on hand and in the bank, $3,750; amounts due from customers from spa treatments, $1,940; building and equipment, $77,000; amounts owed to beauty supply outlets for spa equipment, $4,820; notes payable to a local bank for $40,470. Cash dividends of $6,500 will be paid to the stockholders during the year. Nicole also forecasts that first year sales revenues will be $77,100; wages will be $32,000; the cost of supplies used up will be $15,000; selling and administrative expenses will be $13,000; and income taxes will be $3,200.

Required: 1. Based on Nicoles estimates, prepare a (forecasted) income statement for Nicoles Getaway Spa for the year ended December 31, 2013.

2. Prepare a (forecasted) statement of retained earnings for Nicoles Getaway Spa for the year ended December 31, 2013.

3. Prepare a (forecasted) balance sheet for Nicoles Getaway Spa at December 31, 2013.

4. As of December 31, 2013, would most of the financing for assets come from creditors or stockholders?

Creditors or

Stockholders