Question

Create an income statement for the first partial year of
Catherine’s Cookies from August 1, 2017 to May 15, 2018 from the
information below.

Catherine’s Cookies

In August, 2017, Cathy asked her mom to loan her $100 for baking
supplies (ingredients, bowls, cookie cutters, and baking sheets).
Turns out, she only spent $43.71 at Safeway for ingredients and
$34.53 at Walmart for tools.

She and her friends made 10 dozen treats:

-5 dozen were peanut butter/sold for $6.50/dozen.

-4 dozen were chocolate chip/ sold for $7.25/dozen

-1 dozen were birthday cookies/ sold for $2.50/each.

AFTER first years success in August 2017, Cathy decided to set up a
stand in early May of 2018. The market manager charged Cathy $30
for a table for the day (plus registration fee of $15) in May,
2018.

Cathy and her friend Steven and Elisha worked for her all week and
made $10/hr each. They all spent a total of 27 hrs baking for the
weekend.

Cathy made an additional purchase for ingredient for this round of
baking. She bought 15 pounds of whole wheat flower. 8 pounds of
peanut butter, 9 ilbs of Apple sauce, 32 ounces of liquids, 40
ounces of baking soda, 4.5 ilbs of chocolate chips, 72 ounces of
oats, 5.5 ilbs of pumpkin purée, 48 ounces of vegetable oil, 3
dozen eggs, 10 ilbs of carrots, and 6 pounds of cream cheese. The
Winco bill was $178.20, she used up all ingredients she purchased
to make cookies.

Her and her friends made:

-36 dozen peanut butter cookies

-72 dozen chocolate chip cookies

-144 individual birthday treats

-and 1,000 cranberry cookies to be sold in packages of 50 ( a new
addition)

Cathy buys goody bags to put cookies in, $7.69 for 100 bags on
amazon. She bought 300 bags.

On market day, Cathy used a table from her mom. Which was topped
with a cloth from Amazon for $8.70. She stitched embroidery floss
on it from Joannes which costed $2.98. As well as some baskets to
display products, which came out to $5.00 at the dolllar
store.

By 9am, she sold $100 worth of cookies. She’s sold most of what she
brought. the duck/cranberry treats sold for $6.00 for a package of
50.

She sold half of what she brought:

- She had 10 packages left over at the end of the day.

- She sold 28 dozen peanut butter cookies

- She sold 60 dozen chocolate cookies

- She sold 135 individual birthday treats.

- Making the total sales $1,014.50

3 customers return one individual birthday treat.

**IMPORTANT:** For Ending
Inventory, use the amount of $146.09. The explanation for this
calculation will be covered in the live session on the case.

Answer #1

Notes for closing stock

PARTICULARS | peanut butter | chocolate chip | birthday treat | cranberry cookies |

produced | 36 | 72 | 144 | 20 |

sold | 28 | 60 | 135 | 10 |

stock | 8 | 12 | 9 | 10 |

Total Closing stock= 8+12+9+10= 39

INCOME STATEMENTS

Particulars | amount($) | particulars | amount($) |

purchase expenses | Sales | ||

Baking supplies | 43.71 | peanut butter (5*6.5) | 32.5 |

Tools purchase | 34.53 | coconut cookies (4*7.25) | 29 |

Winco bill | 178.20 | butter cookies (1*2.5) | 2.5 |

Goody bags(7.69*3) | 23.07 | Exhibition sales | 1014.5 |

Exhibition expenses(30+15) | 45 | closing stock | |

Labour expenses(10*27) | 270 | other cookies( 39*146.09) | 5697.51 |

Exhibition expenses (8.7+2.98+5) | 16.68 | crane cookies (10*6) | 60 |

Net profit | 5786.55 | Sales return(3*146.09) | (438.27) |

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