prepare a one-page income statement for the first year of thebusiness you are planning to open, using appropriate categories of revenueand expenses. For assistance in identifying categories and...

prepare a one-page income statement for the first year of the






business you are planning to open, using appropriate categories of revenue






and expenses. For assistance in identifying categories and sub-categories of






revenue and expenses, refer to the Financial Statements--Help in preparing






them link in the Class Resources area (particularly pages 6 through 8 of






"Financial Statement Preparation Guidance Instructions: Financial Statement






Entry Matrix") and/or IRS Form 1040, Schedule C.










For example, under operating expenses list rent, utilities, payroll,






depreciation expenses, insurance, and so on. This part of the assignment is






designed to help you with your business plan assignment. If you have a






service business and do not sell tangible items that require you to maintain






an inventory, you will not have to include a Cost of Goods Sold section in






your Income Statement. Please round off cents to the nearest whole dollar






value - do not show cents values. Completed in word or Excel


I need assistance building a financial income statement for a mock fishing charter company, owned by my spouse and I as owner operators. Must be completed in word or excel. Please see separate attached example. In addition, I am unsure how depreciation (B) in the example document applies, or salary since we are owner operators. Additional Financial Statement Help/Suggestions Summarized below are some other tips to keep in mind when preparing financial statements. · The Income Statement is a stand-alone document. In fact, I recommend that you not attempt to work on the Cash Flow Statement or Balance Sheet until you have finished your Income Statement. · The Cost of Goods Sold section of the Income Statement is in fact the place that deals with inventory. Please look at IRS Form 1040, part III of Schedule C and you will see what I mean. (See week 5 chapter readings for the IRS web site). · Operating expenses are costs that you incur for the current year for items that you use in the current year. Items that will last more than a year are called long-term assets and must be depreciated. You are allowed to claim as an expense the amount of depreciation that you write off during the current year on the Income Statement. · Since long-term assets may be purchased with funds acquired through a loan, you cannot claim the loan principal payments as expenses on the Income Statement because you are already claiming depreciation. However, you will claim the interest that you pay on the loan as an operating expense. · Concerning the principal payments for your loan, we recommend that you review the document on "Financial Statements - help in preparing them" in the Class Resources link on the Home Page of the course. The amount of the principal payments is shown on the Cash Flow Statement as Payment on Long-term Debt. These payments impact the Balance Sheet since the long-term loan under Long-Term Liabilities is reduced because of the payments made during the year (i.e., the remaining balance on the loan is reduced). You do claim the interest that you pay on the loan as an operating expense on the Income Statement for that year. · The value of the long-term assets that you purchase during the year appears on the Balance Sheet as long-term assets. Remember to deduct the amount of depreciation you take under Accumulated Depreciation. Keep in mind that Balance Sheet for the second year of your business must include total assets purchased for the first two years of your business and the total Accumulated Depreciation for the first two years. BUSINESS FINANCIAL INFO: 2 boats worth $76000 combined. (Owned prior to business for leisure) $8500 in fishing tackle/equipment that should last 5 years. Estimated Proceeds sales/Trips annually: Gross sales 84 Customers @ $450 each $37800 Expenses Annually: (NO LOANS) Insurance cost $2658 Prepaid (1 year both combined both boats) Fuel Cost $4000 Miscellaneous equipment/Loss replacement $500 Cash on hand $10000 (savings) Website/App Hosting $200 Storage and Vehicle Maintenance fees $2000 Bait $1800 Ice $250 Office supplies: $700 Financial Statement Preparation Guidance Instructions 1 Financial Statement Preparation Guidance Instructions Financial Statement Entry Matrix (BUSN 5000) The Financial Statement Entry Matrix below was developed in 2011 by Eddie Schwertz, BUSN 5000 Course Lead for Webster University, to assist the online students with the preparation of financial statements required for the Business Plan Term Project. It should be used in conjunction with the Sample Business Plan B: Retail Business located in the Class Resources area of the BUSN 5000 Online course and the Income Statement, Cash Flow Statement, and Balance Sheet financial statements that follow the matrix on pages 3 to 5 of this Word document file. It is not possible to prepare instructions that answer all potential questions. However, an attempt has been made to provide you with the situations you will likely most often encounter during the preparation of the business plan for this course. It is recommended that you print a copy of this help file for preparing the financial statements and a copy of the Sample Business Plan B: Retail Business for reference as you use this matrix. The Financial Statement Entry Matrix consists of four columns. The first column identifies the financial statement item that appears on the three financial statements. In front of each item is a bold upper-case letter. The purpose of the bold, highlighted capital letter (e.g., A, B, C) is to assist you in locating the specific item on the financial statements and to identify the relationships that exist between the item and the financial statements. Note: While preparing financial statements, please remember in accounting that any number shown in parentheses is a negative value. We recommend that you use parentheses for negative numbers to emphasize that the number shown is a negative value. Students should also round all figures to the nearest dollar. 2 Financial Statement Entry Matrix (BUSN 5000) Financial Statement Item Income Statement Cash Flow Statement Balance Sheet A. Net Sales Revenue Operating Activities (Net Sales to Customers) NA B. Depreciation Expenses Operating Expenses Operating Activities Accumulated Depreciation C. Total Operating Expenses Operating Expenses Operating Activities NA D. Accounts Payable NA Operating Activities Current Liabilities E. Inventory Purchases Cost of Goods Sold (COGS) Operating Activities NA F. Ending Inventory Cost of Goods Sold (COGS) NA Current Assets (Ending Inventory at Cost) G. Purchased Property, Plant and Equipment NA Investing Activities Long-term Assets (Fixed Assets) H. Owner Capital Investment (Cash Only) NA Financing Activities Owner Capital Paid for Current Year I. Ending Cash Balance NA Ending Cash Balance and Beginning Cash Balance (for next year) Current Assets (Cash and Equivalents) J. Income Taxes Owed for Current Year Income Taxes Operating Activities Current Liabilities (if not paid in current year) Also show the income tax amount to be paid next year under Owners’ Equity K. Income Taxes Paid from Prior year(s) NA Operating Activities NA L. Owners’ Equity NA NA Owners’ Equity and Owner Capital (beginning of next year) M. Accounts Receivable NA Subtracted from Net Sales Current Assets Note: The shaded bold capital letters on the following sample financial statements link to this matrix. Please do not include the letters in your business plan project financial statements. 3 Your Memories Income Statement For the Year Ended December 31, 2027 Revenue Gross Sales (60 customers @ $250 each) $15,000 Less: Sales Returns and Discounts (500) Net Sales 14,500 A Cost of Goods Sold Beginning Inventory 0 Purchases of DVDs 360 E Less: Ending Inventory (100) F Less: Cost of Goods Sold (260) Gross Profit 14,240 Operating Expenses Selling Expenses Delivery Expenses 700 Advertising Expenses 3,200 Entertainment Expenses 2,200 Miscellaneous Expenses 3,500 Sales Taxes Paid * 48 Total Selling Expenses 9,648 General and Administrative Expenses Rent Expenses 3,500 Utilities Expenses 750 Automobile Expenses 1,500 Insurance Expenses 1,200 Supplies Expenses 2,600 Depreciation Expenses 3,597 B Legal & Pro Services 2,400 Miscellaneous Expenses 1,500 Total G&A Expenses 17,047 Less: Total Operating Expenses (26,695) C Income before Taxes (12,455) Less: Income Taxes (@ 25 %) ** 0 J Net Income after Taxes ($12,455) ------------------------- *Sales taxes are paid on inventory items sold. The sales taxes are normally paid to the state. **Note: The business owner reports net income on his or her IRS Form 1040. In this case the business owner would reduce personal income taxes for this loss. 4 Your Memories Cash Flow Statement For the Year Ended December 31, 2027 Operating Activities* Net Sales to Customers $14,500 A Accounts Receivable from Customers 2027 (0) M Payments for Total Operating Expenses (26,695) C Add Depreciation Expenses Taken 3,597 B Add Accounts Payable for Current Year 2,100 D Payments for 2026 Income Taxes (none) (0) K Payments for 2027 Income Taxes (0) J Payments for Inventory (DVDs) (360) E Net Cash Flows from Operating Activities (6,858) Investing Activities Proceeds from Sale of Property/Plant/Equipment 0 Purchased Property/Plant/Equipment** ( 3,142) G Net Cash Flows from Investing Activities (3,142) Financing Activities Owner Investment (cash only) 10,000 H Owner Withdrawals (0) Repayment of Long-term Debt (0) Net Cash Flows from Financing Activities 10,000 Changes in Cash Balance Net Change in Cash for Current Year 0 Add: Beginning Cash Balance 0 Ending Cash Balance I $0 ------------------ *The business owes suppliers $2,100 as of 12/31/27 for trade credit purchases. Therefore, Accounts Payable amounts to $2,100 for 2027. There are no income taxes payable for 2027. Depreciation Expenses in 2027 are $3,597, which consists of $455 for personal property converted to business property ($2,275 depreciated at $455 per year for five years) and $3,142 in new equipment purchases. ** Only the $3,142 spent in cash for equipment in 2027 is shown under Investing Activities. 5 Your Memories Balance Sheet As of December 31, 2027 Assets Current Assets Cash and Equivalents $0 Accounts Receivable 0 M Ending Inventory (at cost) 100 F Total Current Assets 100 Long-term Assets Property, Plant and Equipment 5,417 G Less: Accumulated Depreciation 1 (3,597) B Other Assets 0 Total Long-term Assets 1,820 Total Assets $1,920 Liabilities and Owners’ Equity Current Liabilities Accounts Payable (supplies) 2,100 D Employment Taxes Payable 0 D Income Taxes Owed (2017) 0 J Notes Payable 0 Total Current Liabilities 2,100 Long-term Liabilities Long Term Debt 0 Other Liabilities 0 Total Long-term Liabilities 0