please make a journal entries
Kate and Maria have recently decided to open a pastry shop in Baltimore. They have a cousin who is willing to invest $400k into their business. Although Kate and Maria are amazing general managers and have found an incredible Pastry Chef, they need assistance in managing the overall finances of the Company. Using the following create a 5 year financial statement analysis (l/S, Cash flow, and Bal. Sht) assuming the investor would like to be considered an owner in the company. Possible initial investment: $400,000 cash Monthly rent in Baltimore: $4,750 and increases 5% a year Estimated start up costs to set up the bakery (Decor, kitchen supplies, etc): $175,000 (75,000 of these are depreciable over 6 years) the rest is immediately expensed Fumiture costs to ready the space for customers (in addition to start up): $45,000 (assume estimated useful life for GAAP is 5 years) Year 2 and year 3: There is a contingency plan to upgrade kitchen appliances/bakery motif each year with a budget of $32,000 a year (estimated useful lives of 10 years) Leasing options may be available Estimated annual revenues from sales are $435,000 the first year, $700,000 the second year and anticipated growth 3% each year following, Annual salary and benefit expense (not including Kate and Marie's invested time) estimated at $150,000 a year Annual cost for food supplies, utilities is $350,000 in year one but expected to lower to $280.000 in subsequent years Amounts above are before interest, depreciation, and taxes (Kate and Marie need help estimating) Tax Rate is 21% (not includina baltimore city taxes Annual salary and benefit expense (not including Kate and Marie's invested time) estimated at $150,000 a year Annual cost for food supplies, utilities is $350,000 in year onu but expected to lower to $280,000 in subsequent years Amounts above are before interest, depreciation, and taxes (att and Marie nood help estimating Tax Rate in 21% (not including baltimore city taxes) Market interest rate for a small business owner is 8.5% Kate and Maria have recently decided to open a pastry shop in Baltimore. They have a cousin who is willing to invest $400k into their business. Although Kate and Maria are amazing general managers and have found an incredible Pastry Chef, they need assistance in managing the overall finances of the Company. Using the following create a 5 year financial statement analysis (l/S, Cash flow, and Bal. Sht) assuming the investor would like to be considered an owner in the company. Possible initial investment: $400,000 cash Monthly rent in Baltimore: $4,750 and increases 5% a year Estimated start up costs to set up the bakery (Decor, kitchen supplies, etc): $175,000 (75,000 of these are depreciable over 6 years) the rest is immediately expensed Fumiture costs to ready the space for customers (in addition to start up): $45,000 (assume estimated useful life for GAAP is 5 years) Year 2 and year 3: There is a contingency plan to upgrade kitchen appliances/bakery motif each year with a budget of $32,000 a year (estimated useful lives of 10 years) Leasing options may be available Estimated annual revenues from sales are $435,000 the first year, $700,000 the second year and anticipated growth 3% each year following, Annual salary and benefit expense (not including Kate and Marie's invested time) estimated at $150,000 a year Annual cost for food supplies, utilities is $350,000 in year one but expected to lower to $280.000 in subsequent years Amounts above are before interest, depreciation, and taxes (Kate and Marie need help estimating) Tax Rate is 21% (not includina baltimore city taxes Annual salary and benefit expense (not including Kate and Marie's invested time) estimated at $150,000 a year Annual cost for food supplies, utilities is $350,000 in year onu but expected to lower to $280,000 in subsequent years Amounts above are before interest, depreciation, and taxes (att and Marie nood help estimating Tax Rate in 21% (not including baltimore city taxes) Market interest rate for a small business owner is 8.5%
