Liz and Luke have recently decided to open a pastry shop in Baltimore. They have a cousin who is willing to invest $420k into their business. Although Liz and Luke are amazing general managers and have found an incredible Pastry Chef, they need assistance in managing the overall finances of the Company.
Using the following to create 5 years of the projected financial statements Income statement, Cash flow, and Balance Sheet assuming the investor would like to be considered an owner in the company. Possible initial investment: $420,000 cash. Monthly rent in Baltimore: $4,850 and increases 5% a year. Estimated start-up costs to set up the bakery (Decor, kitchen supplies, etc): $175,000
(90,000 of these are depreciable over 6 years) the rest is immediately expensed. Furniture costs to ready the space for customers (in addition to start-up): $45,000
(assume estimated useful life for GAAP is 5 years). Year 2 and year 3: There is a plan to upgrade kitchen appliances/bakery motif each year
with a budget of $34,500 a year (estimated useful lives of 10 years). Leasing options
may be available. Estimated annual revenues from sales are $415,000 the first year, $680,000 the second
year and anticipated growth 2.5% each year following. Annual salary and benefit expense (not including a salary for Liz and Luke’s invested
time) estimated at $150,000 a year. Annual cost for food, supplies, utilities is $350,000 in year one but expected to lower to
$280,000 in subsequent years. The amounts above are before interest, depreciation, and taxes (Liz and Luke need help
estimating). The tax rate is 21% (not including Baltimore city taxes). The market interest rate for a small business owner is 6%

The starr theater, owned by meg vargo, will begin operations in march. the starr will be unique in that it will show only triple features of sequential theme movies. as of march 1, the ledger of starr showed: cash $3,150, land $22,000, buildings (concession stand, projection room, ticket booth, and screen) $10,000, equipment $10,000, accounts payable $7,300, and owner’s capital $37,850. during the month of march, the following events and transactions occurred.mar. 2 rented the three indiana jones movies to be shown for the first 3 weeks of march. the film rental was $3,600; $1,600 was paid in cash and $2,000 will be paid on march 10.3 ordered the lord of the rings movies to be shown the last 10 days of march. it will cost $200 per night.9 received $4,500 cash from admissions.10 paid balance due on indiana jones movies rental and $2,200 on march 1 accounts payable.11 starr theater contracted with adam ladd to operate the concession stand. ladd is to pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand.12 paid advertising expenses $900.20 received $5,100 cash from customers for admissions.20 received the lord of the rings movies and paid the rental fee of $2,000.31 paid salaries of $2,900.31 received statement from adam ladd showing gross receipts from concessions of $6,000 and the balance due to starr theater of $900 ($6,000 × 15%) for march. ladd paid one-half the balance due and will remit the remainder on april 5.31 received $9,200 cash from customers for admissions.1.) enter the beginning balances in the ledger.2.) journalize the march transactions. starr records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense. (credit account titles are automatically indented when the amount is entered. do not indent manually. record journal entries in the order presented in the problem. if no entry is required, select "no entry" for the account titles and enter 0 for the amounts.)3.) post the march journal entries to the ledger. (post entries in the order of journal entries presented in the previous question.)