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, $2,150; amounts due from customers from spa treatments, $1,780; building and equipment, $70,000; amounts owed to beauty supply outlets for spa equipment, $4,660; notes payable to a local bank for $38,870. Cash dividends of $2,000 will be paid to the stockholders during the year. Nicole also forecasts that first year sales revenues will be $40,000; wages will be $24,000; the cost of supplies used up will be $7,000; office expenses will be $5,000; and income taxes will be $1,600.

References

Section BreakCC1-1 Financial Statements for a Business Plan [LO 1-2, LO 1-3]

1.

value: 0.50 points

Required information

CC1-1 Part 1

Required:

1.	Based on Nicole's estimates, prepare a (forecasted) income statement for Nicole's Getaway Spa for the year ended December 31, 2015.

References

eBook & Resources

Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.

CC1-1 Part 1Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.

Check my work

2.

value: 0.50 points

Required information

CC1-1 Part 2

2.	Prepare a (forecasted) statement of retained earnings for Nicole's Getaway Spa for the year ended December 31, 2015.

References

eBook & Resources

Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.

CC1-1 Part 2Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.

Check my work

3.

value: 0.50 points

Required information

CC1-1 Part 3

3.	Prepare a (forecasted) balance sheet for Nicole's Getaway Spa at December 31, 2015.

References

eBook & Resources

Financial StatementsDifficulty: 2 MediumLearning Objective: 01-03 Explain how financial statements are used by decision makers.

CC1-1 Part 3Learning Objective: 01-02 Describe the purpose, structure, and content of the four basic financial statements.

Check my work

4.

value: 0.50 points

Required information

CC1-1 Part 4

4.

As of December 31, 2015, would most of the financing for assets come from creditors or stockholders?

	Creditors
	Stockholders