On January $1,2019,$ Jean Higgins organized a new consulting firm called The Higgins Group. On

December $31,2019,$ the company's records showed the following items. First, indicate the

statement to which each item belongs $($Income Statement or Balance Sheet$).$ For each Balance

Sheet item, indicate whether it is an asset, liability, or owner$$s equity. Next, use this

information to prepare a $2019$ income statement and a December $31$ balance sheet for the

business $($use either the attached forms or the templates in Courselink$).$

Item Amount $($$$)$ Statement

Accounts payable $7,500$

Accounts receivable $17,000$

Advertising expense $1,680$

Automobiles $36,000$

Cash $16,000$

Consulting fees earned $22,000$

Office equipment $25,250$

Office supplies $5,000$

Owner's investments $84,000$

Owner's withdrawals $3,360$

Rent expense $2,550$

Salaries expense $6,000$

Utilities expenses $660$

Company Name: The Higgins Group

INCOME STATEMENT

For the One Year Period Ended: Dec $31,2019$

SALES

Sales

COSTS

Cost of Goods Sold

GROSS PROFIT

Gross Profit

EXPENSES

Rent

Utilities

Equipment Lease

Salaries

Benefits $($employer paid$)$

Insurance

Depreciation Expense

Interest

Maintenance

Professional Fees

Advertising

Supplies

Delivery

Travel

Other Expenses

Total Operating Expenses

NET PROFIT

Net Profit

Company Name: The Higgins Group

Balance Sheet December $31,2019$

ASSETS

Current Assets

Cash

Accounts Receivable

Inventory

Supplies

Other Current Assets

Total Current Assets

Fixed Assets

Land and Buildings

Fixtures

Equipment

Vehicles

Other Fixed Assets

Total Fixed Assets

Total Assets

LIABILITIES

Current Liabilities

Accounts Payable

Short$-$term Loans Payable

Taxes Payable

Other Current Liabilities

Total Current Liabilities

Long$-$Term Liabilities

Mortgage Payable

Long$-$term Loans Payable

Other Long$-$term Liabilities

Total Long$-$term Liabilities

Total Liabilities

OWNERS' EQUITY

Capital Investment

Retained Earnings

Total Equity

Total Liabilities and Equity

Projected Cash Flow Statement and Income Statement

A new retail business starts up on January $1,2020.$ In the first year, the business owner expects

to make sales of $$9,500$ per month, while the expected expenses and cash outflows are

provided in the table below. The business owner has $$15,000$ in the business bank account at

the beginning of the year. Complete the monthly projected cash flows and an income

statement for the business for the first year.

Expense Payment Period Amount per

Period

Annual

Amount

Inventory Every other month $($starts Jan$)10,200$

Rent Monthly $900$

Utilities Monthly $215$

Insurance January, July $890$

Interest Annual $($Dec$)860$

Professional fees April, October $900$

Advertising Quarterly $($starts Feb$)625$

Supplies Quarterly $($starts Jan$)75$

Travel Monthly $350$

Drawings Twice per month $1,000$

Depreciation Annual $2,400$

Company Name:

PROJECTED CASH FLOW YEAR OF OPERATION, Ending:

Month $123456789101112$

OPENING Cash Balance

$($a$)$

CASH IN$-$FLOW

Cash sales

Payments received

Total Cash In$-$flow $($b$)$

CASH OUT$-$FLOW

Equipment purchased

Inventory purchased

Rent paid

Utilities paid

Loan payments

Salaries$/$deductions

Supplies$/$equipment

Travel

OTHER expenses

Total Cash Out$-$flow $($c$)$

BALANCE

CLOSING Cash Balance

$($a $+$ b $-$ c$)$

Company Name:

INCOME STATEMENT $($PROJECTED$)$

For the One Year Period Ended:

SALES

Sales

COSTS

Cost of Goods Sold

GROSS PROFIT

Gross Profit

EXPENSES

Rent

Utilities

Equipment Lease

Salaries

Benefits $($employer paid$)$

Insurance

Depreciation Expense

Interest

Maintenance

Professional Fees

Advertising

Supplies

Delivery

Travel

Other Expenses

Total Operating Expenses

NET PROFIT

Net Profit