TOYS $4$ U Project:

Nathan has worked in a retail toy store for $8$ years. Last year, Nathan$$s wages were $$60,000.$ Lately, Nathan has been unhappy with the shop$$s owner. Convinced that he could run a toy store better at a lower cost, Nathan decided to go into business for himself and opened his own shop called Toys $4$ U on January $1$st of the year.

To get the business going, Nathan decided to invest heavily in advertising. He spent $$12,000$ on advertising aimed at consumers. Nathan also purchased computers, printers, and other equipment needed for his retail store for $$6,000.$ He estimated that the equipment he purchased can be used for about five years before maintenance costs would be too high and they would need to be replaced. All equipment is estimated to be worth $10\%$ of their original cost at the end of their life.

At the end of the first year of business, Nathan had received $$150,000$ in cash from customers, of which $$10,000$ was cash paid in advance for pre$-$ordered toys.

A review of Nathan$$s checkbook shows he paid the following $($in addition to those mentioned previously$)$ during the first year of business:

Toys Beginning Inventory, Jan $1$ $$70,000$

Supplies purchased $8,000$

Wages paid$$part$-$time assistant $12,500$

Rent paid $12,000$

$2-$year Insurance policy purchased Jan $13,200$

Utilities paid $1,500$

Miscellaneous expenses $1,000$

Nathan$$s utility bill for the last month of the fiscal year was $$150.$ He has not recorded the bill and plans to pay it in the next $30$ days.

At the end of the year, about $$22,000$ of toys inventory purchased during the year was in his store stock. In addition, $$2,000$ in supplies had not been used. Nathan$$s corporate income tax rate is $30\%.$

Requirement $1(20$ points$)-$ Prepare an income statement for Toys $4$ U for the fiscal year ended December $31,20$xx in proper income statement format $($see sample of proper form on the last page of the requirements file$).$