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Transactions (Don't Drop That Tot, Inc. is on an accrual basis) You and a friend start a babysitter-training business, Don't Drop That Tot, Inc., by
Transactions (Don't Drop That Tot, Inc. is on an accrual basis) You and a friend start a babysitter-training business, Don't Drop That Tot, Inc., by each investing $400 to sell two-hour sessions for $50 per session. 3/1: 3/2: 3/3: You hire another friend, Pat Luck, to help sell training sessions on 10 percent commission, to be paid at the end of every month. No sales have been made, yet. You print and distribute $100 worth of flyers and e-mails to young people to publicize your new business. The printing company, Sir Speedy, invoices you immediately. Their payment policy is net 30 days. Two people sign up online for your training and are being invoiced. You invoice the two customers who signed up. The credit card invoice from Bank of America arrives with your Staples purchase for your computer equipment ($600), and you pay half of it on a two-payment plan. 3/10: Your commissioned salesperson brings you checks for 15 customers to take your training. 3/4: You buy some computer equipment from Staples for $600 because you plan to deliver the training over a website; you write a purchase order and acquire it on a Bank of America credit card. 3/6: 3/7: 3/8: 3/11: You buy 50 certificates at $1 each to send to customers who complete your training. You pay by check to OfficeMax. 3/15: You receive a check for $50 from one of the customers you invoiced. 3/17: You receive a check for $50 from the other customer you invoiced. 3/25: Three more people sign up online, pay with PayPal (3% fee to PayPal), and take your training. 3/26: You pay your electricity bill to Big Power Company for $16 on the day it arrives. 3/27: You pay your Internet Service Provider, Slowsky Internet, Inc., a monthly fee of $50 for the current month. 3/30: You pay 60 cents in postage to USPS for mailing a certificate to each customer who took your training this month. 3/30: You calculate and write a commission check to your salesperson, Pat Luck, for 15 sales. 3/30: You determine your monthly profit. 3/30: You pay 25 percent tax on your profit to the IRS. 3/30: You determine your after-tax profit. 3/30: You calculate your cash flow.
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