Question

Miriam Lopez makes funky messenger-style bags and knapsacks and sells them to fashionable boutiques in Manhattan. Below are her business transactions for the first five working days of March 2007. Create an income statement for the first week of March, and figure Miriam's return on investment for the week.

1. 3/1/07-; Miriam purchases 8 bolts of waterproof canvas cloth from Canal Street Fabrics for $2,000.

2. 3/1/07-; A store called The Lab pays its Feb. 20 invoice for $825.04.

3. 3/1/07-; Miriam pays her $1,000 monthly rent on her office/workspace.

4. 3/2/07-; She buys a used heavy-duty sewing machine for $500. The seller agrees to bill her if she pays the bill within 30 days.

5. 3/2/07-; She sells 10 bags at a SoHo flea market for $50 each.

6. 3/3/07-; Miriam's phone bill was due Feb. 15. To avoid warnings from the phone company, she pays her $120 bill.

7. 3/3/07-; Macy's orders 20 of Miriam's bags "on consignment," meaning that the store will only pay if it can sell the bags. If the bags do not sell, the store will return them.

8. 3/4/07-; Miriam buys buckles and snaps to make the bags for Macy's for $75.

9. 3/4/07-; She decides to hire a publicist to promote her business now that she has a relationship with Macy's. The publicist agrees to work for $250 a week for 6 weeks, with $500 payable in advance to clinch the agreement.

10. 3/5/07-; Miriam takes the buyer from The Lab out to lunch: $75.50.

11. 3/5/07-; She fills her car's gas tank for $43.29. Since she uses the car almost exclusively for business, she records this as a business expense.

12. 3/5/07-; Miriam orders 500 new business cards for $25. She will pay for them when she picks them up next week.

Answer 1

Income Statement'
Sales (10*50)	$ 500
Purchases (2000+75)	2075
Gross profit	-1575
Less: Expenses
Rent ( 5 days)	161
Miscellaneous expenses	76
Fuel	43
Total Expenses	280
Net profit/ (Loss)	$ -1855

Notes: The details for opening stock was not available

The consignment stock will not be accounted, since the stock doesnot belong to Miriam

Rent was paid for full month, for 5 days income statement , only 5 days rent will be considered.

amount received for february invoice will not be recorded in income staement

Orders placed are not recorded, when the same is purchased, it recorded, thus, it will be recorded in month of purchase.

The publicst will work for 6 weeks, there is no work agreed for this week, thus no expense needs to be recorded as the expenses are still not incurred.