Nicole mackisey is thinking of forming her own spa business

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Nicole Mackisey is thinking of forming her own spa business, Nicole's Getaway Spa (NGS). Nicole expects that she and two family members will each contribute $10,000 to the business and receive 1,000 shares each. Nicole forecasts the following amounts for the first year of operations, ending December 31, 2013: Cash on hand and in the bank, $2,150; amounts due from customers from spa treatments, $1,780; building and equipment, $70,000; amounts owed to beauty supply outlets for spa equipment, $4,660; notes payable to a local bank for $38,870. Cash dividends of $2,000 will be paid to the stockholders during the year. Nicole also forecasts that first year sales revenues will be $40,000; wages will be $24,000; the cost of supplies used up will be $7,000; selling and administrative expenses will be $5,000; and income taxes will be $1,600.

Required:
1.

Based on Nicole's estimates, prepare a (forecasted) income statement for Nicole's Getaway Spa for the year ended December 31, 2013.

2.

Prepare a (forecasted) statement of retained earnings for Nicole's Getaway Spa for the year ended December 31, 2013.

3. Prepare a (forecasted) balance sheet for Nicole's Getaway Spa at December 31, 2013.

4.

As of December 31, 2013, would most of the financing for assets come from creditors or stockholders?

Reference no: EM13579650

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