This activity is a practice in preliminary understanding of financial concepts for entrepreneurship. Please respond to the following questions:

1. Please identify the meaning of the net cash build and net cash burn and provide numerical examples.
2. In early 2019, Jennifer (Jen) Liu and Larry Mestas founded Jen and Larry's Frozen Yogurt Company, which was based on the idea of applying the microbrew or microbatch strategy to the production and sale of frozen yogurt.They established a company with no external financing and invested $1.5 millionof their own money to set up the business. They began producing small quantities of unique flavors and blends in limited editions.Revenues were $600,000 in 2019 and were estimated at $1.2 million for 2020.Because Jen and Larry were selling premium frozen yogurt containing premium ingredients, each small cup of yogurt sold for $3 and the cost of producing the frozen yogurt averaged $1.50 per cup.Other expenses plus taxes averaged an additional $1 per cup of frozen yogurt in 2019 and were estimated at $1.20 per cup in 2020.

a.Determine the number of cups of frozen yogurt sold each year.

b.Estimate the dollar amounts of gross profit and net profit for Jen and Larry's venture in 2019 and 2020.

c.Calculate the gross profit margin ratio and net profit margin ratio in 2019 and 2020

d.Calculate the return on assets in both 2019 and 2020.

e.Calculate total asset turnover ratios for 2019 and 2020.

f.Explain what has occurred between the two years.

3.The owners of a new venture have decided to organize as a corporation.The initial equity investment is valued at $100,000 reflecting contributions of the entrepreneur and her family and friends.One hundred thousand shares of stock were initially issued.

C1: What dollar amount would initially be recorded in the common stock account?

C2: If a par value on the common stock was set at $.01 per share, show how the initial equity investment would be recorded.

C3: Now assume that 20,000 additional shares of stock are sold to an angel investor at $5 per share six months after the initial incorporation.

Assuming both issues did not have par value, calculate and provide components of the stockholders equity.

Assuming the first issue had a par value of $ 0.01 and the second issue had a par value of $0.04, calculate and provide components of the stockholders' equity.

C4: At the end of the first year of operation, the venture recorded an operating loss of $80,000.Assuming the $.01 par value in item 3 above, show the dollar amounts in the common stock account, the additional paid-in-capital account, and the retained earnings account at the end of one year.Also indicate the cumulative amount in stockholders' equity at the end of one year.