Quiz #1 You decide to sell candies at a soccer game during December 2003 at the Rose Bowl to make some extra money. You have the following transactions: t You invest $3000 and receive stock in your new company, Rose Bowl Candies, Inc. t You pay the rent for the space during the bowl game, cash of $300. t You buy bs candies for $6 each pound, paying $1500 cash and pay the rest after the game. t You sell candies for $11 per pound, all for cash. Required: Prepare the income statement, the statement of changes in shareholders’ equity, and the statement of cash flows for December Prepare the balance sheet at December 31, 2003.

Rose Bowl Candies Inc. Income Statement For the month ended December 31, 2001 Revenue Sales$11000 Expenses Cost of sales $ 6000 Rent expenses Net income $ 4700

Rose Bowl Candies Inc Statement of Changes in Shareholder’s Equity For the month ended December 31, 2001 Beginning contributed capital 0 Contributions during the year 3000 Ending contributed capital 3,000 Beginning retained earning $ 0 Net Income for the year 4700 Dividends 0 Ending Retained earning $4700 Total shareholder’s equity $7700

Rose Bowl Candies, Inc Balance Sheet AS of December 31, 2003 Assets Liabilities + Shareholder’s Equity Assets Liabilities + Shareholder’s Equity Cash$12200Accounts payable 4500 Inventory 0 Common stock 3,000 Prepaid Rent 0 Retained earnings 4700 Total assets$ Total L + SH’s Equity $12200

Rose Bowl Candies, Inc Statement of Cash Flows For the month ended December 31, 2003 Cash from operating activities Cash from customers$ Cash paid for supplies (1500) Cash paid for rent (300) Total cash from operations$9200 Cash from investing activities -0- Cash from financing activities Cash received from issuance of Common Stock 3,000 Dividends (0) Total Cash from Financing3000 Net Increase in Cash $ Net Increase in Cash $ Cash, Beginning Balance 0 Cash, ending Balance$12200