Nicole Mackisey is thinking of forming her own spa business, Nicole's Getaway Spa (NGS). Nicole expects that
Question:
Nicole Mackisey is thinking of forming her own spa business, Nicole's 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, 2015: Cash on hand and in the bank, $3,350; amounts due from customers from spa treatments, $1,900; building and equipment, $73,000; amounts owed to beauty supply outlets for spa equipment, $4,780; notes payable to a local bank for $40,070. Cash dividends of $2,500 will be paid to the stockholders during the year. Nicole also forecasts that first year sales revenues will be $62,700; wages will be $30,000; the cost of supplies used up will be $13,000; office expenses will be $11,000; and income taxes will be $2,800. |
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