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Week 4

18/09/2020 Client: m166 Deadline: 7 Days

 


Purpose of Assignment :


The purpose of this assignment is to allow students to gain the necessary knowledge to manage cost and determine project viability through capital budgeting techniques, so they can effectively minimize the cumulative error between the projected values and actual values over the relevant time horizon.


Note: The official term Income Statement is also known informally as Profit and Loss Statement. 


Assignment Steps:


Create a simple Profit and Loss Statement for the first two years of your dream company following the income statement format.  (This is to be created from scratch for the first two years of your own company, do not copy a company from the internet).


Assume this is the first two years of your dream company, starting from scratch. (We will use this company next week to create a balance sheet and cash flow statement.) Explain how you calculated revenue, cost of goods sold (if required, service companies may not have COGS), and operating expenses (detail each expense account listed) for year one and explain changes for each account in order to report the year 2 numbers.


Analyze the revenue items based on information collected and make adjustments. The start for your income statement is calculating revenue.


Provide calculations and explanations for how you calculated revenue, cost of goods sold (if required), and operating expenses (show each expense).


Conduct an internet search for an income statement template or use the example located in the textbook as a template for your income statement. In Chapter 3, on page 45, in Table 3.2 you will find an example of a profit and loss statement or you can search the internet for an example.  I will also provide an example of all three statements (income, balance sheet, and cash flow) to help you understand what we are doing the next two weeks.


Format assignment consistent with APA guidelines. 


Submit your assignment.

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