Projected Financial Statements for Julie's Jewelry Business For the 3 months ended March 31, 2021 Business Activity: $2,250 will be contributed by the owner in December. Julie expects to purchase $2000 equipment with a bank loan in January. She will make a 10% down payment. $ 150 $ $ 175 75 Sun design necklace Moon design necklace Cost of Sun design necklace Cost of Moon design necklace Annual Growth Rate Advertising as a percent of total sales General expense Assumptions Days Receivable from Total Sales Inventory (% of next month COGS) A/P % of Advertising plus General Expenses) Equipment Life in months 5 25% 15% 60 $ 90 50% 5% 1,500 Jan $ Mar April Units Sun necklace sold Units Moon necklace sold Feb 23 18 Jan Feb Mar April P&L Statement Sun Necklace Sales Moon Necklace Sales Total Sales Cost of Sun Necklaces Sold Cost of Moon Necklaces Sold Total Cost of Goods Sold Gross profit Expenses Advertising General Expenses Depreciation Total Expenses Net Income Check: April N/I = $1,773 Statement of Cash Flows Operating Activities Net Income Changes in Cur. Assets and Liabilities Change in Accounts Receivable Change In Inventory on Hand Change In Accounts Payable Non-cash expenses Depreciation Cash Flow from Operating Activities Investing Activities Change In Equipment Cash Flow from Investing Activities Financing Activities Change In Notes Payable Change In Paid-in-Capital Change In Less: Owner's Withdrawal Cash Flow from Financing Activities Net increasel(decrease) in cash Cash--beginning of month Cash-end of month Check: March Cash--end of month = $4,836 Balance Sheet Assets Cash Accounts Receivable Inventory on Hand Equipment Less Accumulated Depreciation Total Assets 2.000 Check: March Assets = $8,874 $ Liabilities Accounts Payable Notes Payable Total Liabilities Owner's Equity Paid-in-Capital Less: Owner's Withdrawal Retained Earnings Total Owner's Equity Total Liabilities and Owner's Equity $ After completing projected financial statements, answer the following questions: (round to whole numbers) KEY FINANCIAL RATIOS January February March (as a %) Quick Ratio Gross Profit Margin Inventory Turnover Return on Assets (as a %) What is the cash 1. If the price for the Sun Necklace increases to $175, what is the profit (Net Income) or loss in February? balance at the end of February? NOTE: Change the price back to $150. 2. How much Cash was generated by Financing Activities in January? 3. How comfortable are you with the company's debt level? Do you recommend any changes? Why or why not? 4. If the owner could invest another $1000 in the business, what should she do with the extra money to increase Sales and Net Income Projected Financial Statements for Julie's Jewelry Business For the 3 months ended March 31, 2021 Business Activity: $2,250 will be contributed by the owner in December. Julie expects to purchase $2000 equipment with a bank loan in January. She will make a 10% down payment. $ 150 $ $ 175 75 Sun design necklace Moon design necklace Cost of Sun design necklace Cost of Moon design necklace Annual Growth Rate Advertising as a percent of total sales General expense Assumptions Days Receivable from Total Sales Inventory (% of next month COGS) A/P % of Advertising plus General Expenses) Equipment Life in months 5 25% 15% 60 $ 90 50% 5% 1,500 Jan $ Mar April Units Sun necklace sold Units Moon necklace sold Feb 23 18 Jan Feb Mar April P&L Statement Sun Necklace Sales Moon Necklace Sales Total Sales Cost of Sun Necklaces Sold Cost of Moon Necklaces Sold Total Cost of Goods Sold Gross profit Expenses Advertising General Expenses Depreciation Total Expenses Net Income Check: April N/I = $1,773 Statement of Cash Flows Operating Activities Net Income Changes in Cur. Assets and Liabilities Change in Accounts Receivable Change In Inventory on Hand Change In Accounts Payable Non-cash expenses Depreciation Cash Flow from Operating Activities Investing Activities Change In Equipment Cash Flow from Investing Activities Financing Activities Change In Notes Payable Change In Paid-in-Capital Change In Less: Owner's Withdrawal Cash Flow from Financing Activities Net increasel(decrease) in cash Cash--beginning of month Cash-end of month Check: March Cash--end of month = $4,836 Balance Sheet Assets Cash Accounts Receivable Inventory on Hand Equipment Less Accumulated Depreciation Total Assets 2.000 Check: March Assets = $8,874 $ Liabilities Accounts Payable Notes Payable Total Liabilities Owner's Equity Paid-in-Capital Less: Owner's Withdrawal Retained Earnings Total Owner's Equity Total Liabilities and Owner's Equity $ After completing projected financial statements, answer the following questions: (round to whole numbers) KEY FINANCIAL RATIOS January February March (as a %) Quick Ratio Gross Profit Margin Inventory Turnover Return on Assets (as a %) What is the cash 1. If the price for the Sun Necklace increases to $175, what is the profit (Net Income) or loss in February? balance at the end of February? NOTE: Change the price back to $150. 2. How much Cash was generated by Financing Activities in January? 3. How comfortable are you with the company's debt level? Do you recommend any changes? Why or why not? 4. If the owner could invest another $1000 in the business, what should she do with the extra money to increase Sales and Net Income