Penny Cassidy is considering forming her own pool service and supply company, Penny's Pool Service & Supply, Inc. (PPSS). She has decided to incorporate the business to limit her legal liability. She expects invest $37,000 of her own savings and receive 1,000 shares of common stock. Her plan for the first year of operations forecasts the following amounts at December 31, the end of the current year: Cash in bank, $11,600; amounts due from customers for services rendered, $4,000; pool supplies inventory, $6,300; equipment, $29,700; amounts owed to Pool Corporation, Inc., a pool supply wholesaler, $5,200; note payable to the bank, $6,700. Penny forecasts first-year sales of $70,200, wages of $25,700, cost of supplies used $9,900, other administrative expenses of $6,200, and income tax expense of $5,700. She expects to pay herself a $20,000 dividend as the sole stockholder of the company. If Penny's estimates are correct, what would the following first-year financial statements look like for Penny's Pool Service & Supply, Inc.?

Penny Cassidy is considering forming her own pool service and supply company, Penny's Pool Service & Supply, Inc. (PPSS). She has decided to incorporate the business to limit her legal liability. She expects invest $37,000 of her own savings and receive 1,000 shares of common stock. Her plan for the first year of operations forecasts the following amounts at December 31, the end of the current year: Cash in bank, $11,600; amounts due from customers for services rendered, $4,000; pool supplies inventory, $6,300; equipment, $29,700; amounts owed to Pool Corporation, Inc., a pool supply wholesaler, $5,200; note payable to the bank, $6,700. Penny forecasts first-year sales of $70,200, wages of $25,700, cost of supplies used $9,900, other administrative expenses of $6,200, and income tax expense of $5,700. She expects to pay herself a $20,000 dividend as the sole stockholder of the company. If Penny's estimates are correct, what would the following first-year financial statements look like for Penny's Pool Service & Supply, Inc.?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 43P

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