Tasks 1 Create a properly formatted income statement. 2 Create a properly formatted statement of retained earnings. 3 Create a properly formatted balance sheet. 4 Offer some opinions on this business. Is it profitable? Does it have any liquidity issues? Hints a It would be very helpful for you to begin this task by calculating cost of goods sold. b Along with (a) above, it would also be wise to begin by deciding how to allocate overhead for the month. c While the project doesn't explicitly require a journal or ledger, these items might help you make sure you're keeping everything balanced. d Ask your professor for help. He kind of wants to help :) Date Transaction 11/1/21 You and your partners start a bakery, investing a total of $200,000 in return for 1,000 total shares of $1 par common stock. 11/2/21 You spend $36,000 prepaying a year's worth of rent on a 1,000 sqft bakery, complete with ovens, mixers, and all other necessary equipment. 11/3/21 You purchase $30,000 of ingredients on account. 11/3/21 You also hire two people to staff the bakery at a wage of $15/hour. Paydays are the 15th and 30th of the month. 11/5/21 Grand Opening! Today, you open your doors and start selling cakes. 11/8/21 You pay $1,200 to Google to run ads for the next week to drum up business. Regular business happens. See the additional facts on the right for a summary of your Additional facts: business activity. Since you're just starting out, you only make cakes. Each cake uses $11.50 of ingredients and takes 10 minutes of total labor to produce. 11/30/21 You check your email and see the following, all payable by 12/15: In the month of November, you sold 2,112 individual cakes, charging a flat $45 apiece. All customers pay cash. a Electricity bill: $ 1,400 At the end of the month, you have 52 cakes remaining in inventory. b Gas bill: $ 2,150 Of the 1,000 square feet of rented space, 800 are used for baking, and 200 are used to accommodate customers. c Water bill: $ 800 10% of your electrical utility bill goes toward the storefront; the other 90% (and 100% of other utilities) go to the baking process. 11/30/21 You decide to pay the owners a $2/share dividend. The income tax rate is a flat 30%. Although you plan to hire a full-time cashier, you're working the register this month and taking no salary. Your only employees are the two bakers. Tasks 1 Create a properly formatted income statement. 2 Create a properly formatted statement of retained earnings. 3 Create a properly formatted balance sheet. 4 Offer some opinions on this business. Is it profitable? Does it have any liquidity issues? Hints a It would be very helpful for you to begin this task by calculating cost of goods sold. b Along with (a) above, it would also be wise to begin by deciding how to allocate overhead for the month. c While the project doesn't explicitly require a journal or ledger, these items might help you make sure you're keeping everything balanced. d Ask your professor for help. He kind of wants to help :) Date Transaction 11/1/21 You and your partners start a bakery, investing a total of $200,000 in return for 1,000 total shares of $1 par common stock. 11/2/21 You spend $36,000 prepaying a year's worth of rent on a 1,000 sqft bakery, complete with ovens, mixers, and all other necessary equipment. 11/3/21 You purchase $30,000 of ingredients on account. 11/3/21 You also hire two people to staff the bakery at a wage of $15/hour. Paydays are the 15th and 30th of the month. 11/5/21 Grand Opening! Today, you open your doors and start selling cakes. 11/8/21 You pay $1,200 to Google to run ads for the next week to drum up business. Regular business happens. See the additional facts on the right for a summary of your Additional facts: business activity. Since you're just starting out, you only make cakes. Each cake uses $11.50 of ingredients and takes 10 minutes of total labor to produce. 11/30/21 You check your email and see the following, all payable by 12/15: In the month of November, you sold 2,112 individual cakes, charging a flat $45 apiece. All customers pay cash. a Electricity bill: $ 1,400 At the end of the month, you have 52 cakes remaining in inventory. b Gas bill: $ 2,150 Of the 1,000 square feet of rented space, 800 are used for baking, and 200 are used to accommodate customers. c Water bill: $ 800 10% of your electrical utility bill goes toward the storefront; the other 90% (and 100% of other utilities) go to the baking process. 11/30/21 You decide to pay the owners a $2/share dividend. The income tax rate is a flat 30%. Although you plan to hire a full-time cashier, you're working the register this month and taking no salary. Your only employees are the two bakers