1. list your company's revenue streams. (1.0 points)

2. list the pieces of information you will include in a receipt (including credit card information). (1.0 points)

3. will your company use cash-basis or accrual-basis accounting? explain why. (2-5 sentences. 1.0 points)

4. will you use single-entry bookkeeping or double-entry bookkeeping? explain why. (1-5 sentences. 1.0 points)

5. list the information you will collect about customers, and describe the system you will use for recording it. (make a list, and then write 1-2 sentences describing the system. 2.0 points)

6. create a balance sheet for the opening day of your company in the format below. use your best estimates, but it doesn't have to be exact. keep the section headings (assets, liabilities, and so on), but replace the specific information with your company's information. (4.0 points)
tip: review the lesson 3 information about balance sheets first.

assets
list the types of assets here and their dollar values.
at the end of the list, calculate the total by adding them.

liabilities
list the types of liabilities here and their dollar values.
at the end of the list, calculate the total by adding them.

assets - liabilities = owner equity
subtract the liability total from the asset total to get owner equity.

owner equity
list the investors who have equity, the percentage of equity they have, and the dollar amount it is. (it may be 0.)
tip: you don't need to include retained earnings on an opening day sheet, since there are no earnings yet.

7. create an estimated one-year income statement for one year from now, in the format below. use your best predictions, but it won't be exactly accurate, since it's hard to predict a year into the future. keep the section headings (revenue, cost of goods sold, and so on), but replace the specific information with your company's information. (7.5 points)
tip: review the lesson 3 information about income statements first.

revenue
list all types of revenue here (such as internet sales, flea market sales, and so on) and the dollar amounts you expect to earn from them over the next year.
at the end of the list, calculate the total by adding them.

cost of goods or services sold
list the costs of goods or services sold here (see assignment 2 for more information on this). make sure to estimate them for the next year.
at the end of the list, calculate the total by adding them.

gross profit
subtract the cost of goods sold from the total revenue to calculate the gross profit here.

other expenses
list other expenses here. make sure to estimate their costs for the next year.
at the end of the list, calculate the total by adding them.

net profit
subtract the total of other expenses from the gross profit to calculate the net profit here.

8. use the information below about an example company to calculate the financial ratios below.
net profit before tax = $208,000
total equity = $500,000
total assets = $330,000
total liabilities = $150,000
current assets = $64,000
current liabilities= $45,000

a. calculate the return on equity (roe) for the example company. (0.5 points)

b. calculate the return on assets (roa) for the example company. (0.5 points)

c. calculate the debt ratio for the example company. (0.5 points)

d. calculate the debt to equity ratio for the example company. (0.5 points)

e. calculate the current ratio for the example company. (0.5 points)