You are on page 1of 3

Cash

Accounts
Receivable
Inventories Equipment
Prepaid
Expenses = Short-term
Loans
Interest
Payable
Wages Payable Owners’ Equity Description of Transaction

Loan (from 2 cousins, 6%


Jan. 2006 US$10,000.00 US$10,000.00
annual interest rate)
US$1,000.00 US$1,000.00 Investment
Mar. 2006 (US$1,200.00) US$1,200.00 Prepaid RENT
(US$3,300.00) US$3,300.00 INVENTORY
Cash Register (refundable
(US$250.00) US$250.00
deposit)
(US$100.00) US$100.00 store SUPPLIES
(US$150.00) US$150.00 Prepaid ADVERTISING
(US$2,000.00) US$2,000.00 Computer
Apr. 2 2006 (US$150.00) (US$150.00) “used” advertising
SUBTOTAL US$4,000.00 US$0.00 US$3,400.00 US$2,250.00 US$1,200.00 US$10,000.00 US$0.00 US$0.00 US$850.00 Jan 1 - Mar 31 2006
TOTAL US$10,850.00 TOTAL US$10,850.00
May. 2006 (US$1,800.00) US$1,800.00 Sewing Machine
US$7,400.00 US$320.00 US$7,720.00 Wedding Arrangements
(US$1,510.00) US$90.00 (US$1,600.00) Salary
(US$1,800.00) (US$1,800.00) RENT
(US$2,900.00) US$2,900.00 INVENTORY
(US$2,100.00) (US$2,100.00) used inventory
(US$80.00) (US$80.00) used supplies
SUBTOTAL US$3,390.00 US$320.00 US$4,120.00 US$4,050.00 US$1,200.00 US$10,000.00 US$0.00 US$90.00 US$2,990.00 Apr 1 - Jun 30 2006
TOTAL US$13,080.00 TOTAL US$13,080.00
US$300.00 (US$300.00) Part of Loan
Depreciation (sewing
(US$60.00) (US$60.00)
machine)
(US$250.00) (US$250.00) Depreciation (computer)
SUBTOTAL US$3,390.00 US$320.00 US$4,120.00 US$3,740.00 US$1,200.00 US$10,000.00 US$300.00 US$90.00 US$2,380.00
TOTAL US$12,770.00 TOTAL US$12,770.00
RIBBONS AN’ BOWS, INC.
Income Statement
As of June 30, 2006

Revenues US$7,720.00
Less Cost of Goods Sold US$2,100.00
Gross Profit US$5,620.00
Less Operating Expenses
Supplies US$80.00
Salaries US$1,600.00
Rent US$1,800.00
Advertisement US$150.00
Less Depreciation and Amortization
Depreciation of Computer US$250.00
Depreciation of Sewing Machine US$60.00
Other Expenses
Operating Profit US$1,680.00
Interest Expense US$300.00
Net Income US$1,380.00
RIBBONS AN’ BOWS, INC.
Balance Sheet
As of June 30, 2006

Assets
Current Assets
Cash US$3,390
Accounts Receivable US$320
Inventory US$4,120
Prepaid Expenses US$1,200
Total Current Assets US$9,030

Fixed Assets
Property, Plant and Equipment US$4,050
Less Accumulated Depreciation (US$310)
Total Net Fixed Assets US$3,740

Total Assets US$12,770

Liabilities and Owners’ Equity


Current Liabilities
Short-term Loans US$10,000.00
Interest Payable US$300.00
Wages Payable US$90.00
Total Liabilities US$10,390.00

Owners’ Equity
Carmen Diaz, capital US$1,000.00
Retained Earnings US$1,380.00
Total Owners’ Equity US$2,380.00

Total Liabilities and Owners’ Equity US$12,770.00