The Lemonade Stand Merchandising Operations

DAY 1

Open the stand with $10 from my piggy bank

Buy 10 lemons for $5

Borrow $2 Sugar from mom

Make 50 cups of lemonade, sell all 50 cups @ $.50 each.

Compute cost of goods sold (COGS),

Day Two

Pay Mom back her $2

Go to the store and buy 20 lemons for $10

Buy $4 sugar

Dig in my piggy bank and put $5 more into my business

Buy 100 paper cups for $5 one cup per glass of lemonade (direct or indirect costs?)

Buy a red wagon at rummage sale for $5

Sell 90 cups of lemonade at $.50 each.

Day 3

Big do-ins today in the park across the street,

Hire my sister to help -- $5

Buy 40 lemons cost went up to $25 (something about a frost in Florida)

Buy $8 of sugar (thank goodness frost doesnt hurt sugar)

Buy 200 cups at cost of $10

Hire the loud mouth kid next door to ride bike around the park - $5

Sell 190 cups of lemonade at $.60 cents each.

What is the COGS sold? HMM ever hear of FIFO or LIFO??

Day 4

Tired of selling lemonade so I am going to close my business out.

I have 20 cups of lemonade left, I sell to loud mouth kid next door for $5. He promises to pay me in two days.

Day 5

I look out the window and see the moving truck pulling away from the loud mouth kids house. He is sticking his head out the window yelling Ill never pay you, sucker!!!

How do I handle the $5 A/R?