STEP 1 Using the following events, complete your horizontal worksheet of events in the Excel sheet provided. 2017 Events

1. 1) Purchased $1,800 supplies on account

2. 2) Received $50,000 cash from issuing common stock to a local investor

3. 3) Paid $12,000 cash for 12 months of rent beginning 3/1/2017

4. 4) Paid $1,500 of the supplies amount due on accounts payable

5. 5) Received $10,000 for two future unearned corporate dance performances

6. 6) Sold $13,000 of tickets to holiday dance festival performances for cash revenue

7. 7) Paid cash for $6,100 of dancer salaries expense

8. 8) Recognized the expense through 12/31/2017 for the rent prepaid in transaction #3 above

9. 9) Determined that $200 of supplies remained on hand as of 12/31/2017 and the rest had been expensed

10. 10) Recognized $5,000 of revenue earned through 12/31/2017 for performance #1 under the contract

    detailed in transaction #5 above

2018 Events

1. 1) Expensed all rent remaining on the 2017 lease

2. 2) Paid $25,000 cash for 24 months of rent beginning 3/1/2018

3. 3) Sold $30,000 of dance tickets with 75% purchased on account

4. 4) Determined that the amount of revenue remaining uncollected at the end of the year was $15,000

5. 5) Recognized the remaining revenue earned under the 2017 prepaid contract

6. 6) Paid cash to purchase $2,000 of supplies and expensed them as used

7. 7) Reviewed the total supplies to determine that $500 remained on 12/31/2018

8. 8) Paid cash for $6,100 of dancer salaries expense

9. 9) Hired new instructor for $1,500 per month salary to start on 1/1/2019

10. 10) Recognized the expense through 12/31/2018 for the rent prepaid in transaction #2 above

2019 Events

1. 1) Recognized the rent expense for 2019

2. 2) Paid cash salaries to the new instructor hired in 2018 plus another $6,000 for other dancers

3. 3) Signed new $20,000 bank loan and immediately withdrew the full amount in cash

4. 4) Paid remaining amount due for supplies previously purchased on account

5. 5) Sold $35,000 of dance tickets with 90% purchased on account

6. 6) Determined that the amount of revenue remaining uncollected at the end of the year was $26,500

7. 7) Purchased new storage space for $15,000

8. 8) Signed contract to perform 3 future corporate shows at $5,000 per show

9. 9) Determined that $250 of supplies remained on 12/31/2019

10. 10) Paid cash for $37,000 of new advertising

STEP 2 Using the worksheet results, next build the Income Statement, Statements of Changes in Stockholders Equity, Balance Sheet, and Statements of Cash Flows for all three years.

Unless specified above, assume there are no taxes or depreciation. Complete the above in Excel by placing each entry in the appropriate cell using clear and easy to decipher formatting.

STEP 3 Answer the following questions on the economics of this company. Enter your answers on the third tab of the spreadsheet:

1. 1) A new law is passed that places a cap on the amount you can pay your employees, which lowers your total salaries expense. How does this change in the cost of an input shift your supply curve?

2. 2) Another company launches offering the same type of corporate performances, provides the same level of service/quality, and uses the same number of performers. This new company prices their contracts 20% below your price. How does this lower priced offering shift the demand curve for your performances?

3. 3) You notice that sales are much higher when your ticket people wear green pants, so you thereafter require all ticket people to wear green pants. Is this an incorrect application of causation or correlation?

4. 4) In 2020 you sign several new corporate contracts and thus need to store more equipment. Fitting all you need for the new jobs into the storage space purchased in 2019 is becoming difficult. You identify a larger space available to purchase for $30,000. Assuming you can afford the cost, describe how you would decide how to proceed by performing a cost benefit analysis to compare the new space to the $15,000 you previously spent.