Prepare an income statement
Not what you're looking for?
3. Mike, an accounting professor at the University of Washington supplements his income by selling cappuccino on campus to students and other faculty members when he is not teaching, doing research, creating curriculum, or attending committee meetings. He sells iced cappuccino in hot weather. Mike has $650 invested in his cappuccino business, which consists of $100 of miscellaneous cash that he keeps in his cash drawer, the cappuccino machine, and the ice shaver.
Since there is a popular football game on the Friday of the last week of August, Mike anticipates that Friday will be a busy day. He buys an unusually large amount of materials that goes into making and selling the cappuccino for $870 and increases the cash in his cash drawer to $200 to make change. His supplier, Stewart Enterprises, allows him to charge $348 of his total purchases, and he pays cash for the rest. Friday morning, he pays $12 for several bags of ice, and $10 for cups.
With temperatures in the 90s, Mike sells three-quarters of his purchase for $910 in cash. At the end of the day, he returns home with his unsold cappuccino materials (except for the unsold ice which melted) with plans to replenish his inventory, pay his supplier bill, and obtain more ice and cups for finals week.
Required
a. Prepare an income statement to reflect the results of operations for Mike's Friday business. List any items that you found difficult to measure.
b. Evaluate Mike's relative success in selling cappuccino.
Purchase this Solution
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Basics of corporate finance
These questions will test you on your knowledge of finance.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.