Manufacturing and distributing simple wooden toys for children that you sell to small boutiques on terms of payment in 30 days. Your first fiscal year ended December 31, 2011 and you are preparing your first annual financial statements. Based on the following
Information, prepare a balance sheet and income statement for your first year in business. Make reasonable estimates for any data that you feel is necessary but missing, explain the basis for your estimates. What kind of financial condition and level of initial success do your statements reflect?
Contributed capital $10,000 Bank loan at 6% per annum, originally borrowed 1/1/2011 $10,000; owing 12/31/2011 $5000 Sales $101,000 Labor expense $55,000 -all paid in 2011 Material used in production during the year $13,000 Inventories of materials on hand 12/31/2011 $6000 Office and production equipment & tools purchased $15,000 Rent $9,000 Utilities, supplies, miscellaneous overhead $5,400 Total taxes of 33% on profits, payable April 2012 Cash in the bank at 12/31/2011 $12000