Analyzing Financial Statements of Creative Cakes: Year 2

School: University Of Georgia - Course: BUSN 180 - Subject: Accounting

W06 Practice: Creative Cakes 3 Financial Statements Financial Statements For the Period of January 1 - June 31, Year 2 Year two Activity This is Creative Cake's second year in business. Purchase $1000 of equipment with note payable in February The owner withdraws $500 cash in June. Avg. cake price30 $ Variable Cost per Cake 14 $ Equip. Life / m Cakes/customer 1.0 Days Receivab Annual growth rate (divide by 12) 9% Days Payable Adverting per Cake$0.50 Cake Sales in Units292929 DecJanFeb Revenue Cake Sales 877$ 883 $ Cost of Goods Sold 409412 Gross Profit 467$ 471 $ Expenses Advertising Cost15$ 15 $ Depreciation4269 Rent ($250/mo)250250 Internet ($55/mo)5555 Legal Fees ($150 paid in Jan. each year)150 Total Expenses 511$ 389 $ Net Income (44)$ 82 $ DecJanFeb Operating Activities Net Income(44)$ 82 $ Changes in Cur. Assets and Liabilities Change in Accounts Receivable(0)(1) Change in Inventory (baking supplies)0(2) Change in Accounts Payable17(140) Non-cash expenses Depreciation4269 Cash Flow From Operating Activities16$ 9$ Creative Cakes P STAT Assumptions Days Inventory (

Investing Activities Change in Equipment-(1,000) Cash Flow from Investing Activities-$ (1,000) $ Financing Activities Change in Notes Payable(100)900 Change in Paid-in-Capital- Change in Owner's Withdrawal- Cash Flow from Financing Activities(100)$ 900 $ Net Increase/(Decrease) in cash (84)(91) Cash--beginning of month 2,8512,767 Cash--end of month 2,767$ 2,675