The Garden Place Journal

Date Account Debit Credit

1-Apr-06 Common Shares $60,000.0
Cash $60,000.0
1-Apr-06 Loan $32,000.0
Cash $32,000.0
1-Apr-06 Pickup Truck $12,000.0
Truck Loan $10,000.0
Cash $2,000.0
1-Apr-06 Display Equipment $6,000.0
Cash $6,000.0
1-Apr-06 Rototiller $400.0
Cash $400.0
1-Apr-06 Cash register $3,600.0
Cash $3,600.0
1-Apr-06 Inventory $60,000.0
Cash $60,000.0
31-Mar-07 Rent Expenses (Monthly $600) $7,200.0
31-Mar-07 Telephone Expenses (Monthly $100) $1,200.0
31-Mar-07 Utility Expenses (Monthly $400) $4,800.0
Cash $13,200.0
31-Mar-07 Mary Jane Salary $40,000.0
31-Mar-07 Employee Wages $72,000.0
Cash $112,000.0
31-Mar-07 Truck Loan Repayment (Interest) $698.7
31-Mar-07 Truck Loan Repayment (Principal) $3,333.3
Cash $4,032.0

31-Mar-07 Loan Repayment Interest $4,160.0

31-Mar-07 Loan Repayment Principal $8,000.0
Cash $12,160.0
31-Mar-07 Projected Sales $400,000.0
Cash $340,000.0
31-Mar-07 Account Receivable $60,000.0
31-Mar-07 Advertising Expense $20,000.0
Cash $20,000.0
31-Mar-07 Additional Inventory $200,000.0
Cash $200,000.0

Total $935,392.0 $935,392.0

 Common Shares Cash
Date Desc Debit Credit Date Desc
1-Apr-06 Equity $60,000.0 1-Apr-06 Shares
$60,000.0 1-Apr-06 Loan
Loan 1-Apr-06 Truck Purchase
Date Desc Debit Credit 1-Apr-06 Display Eqipment
1-Apr-06 $32,000.0 1-Apr-06 Cash Register
1-Apr-06 Truck Loan $10,000.0 1-Apr-06 Rototiller
31-Mar-07 Repayment $8,000.0 1-Apr-06 Initial Inventory
31-Mar-07 Truck Loan Repayment $3,333.3 1-Apr-06 Utility Bills
$30,666.7 31-Mar-07 Salary & Wages
Interest 31-Mar-07 Truck Loan Repay
Date Desc Debit Credit 31-Mar-07 Loan Repay
31-Mar-07 Repayment $4,160.0 31-Mar-07 Sales Revenue
31-Mar-07 Truck Loan Repayment $698.7 31-Mar-07 Advertisement
$4,858.7 31-Mar-07 Additional Inventory
Equipments
Date Desc Debit Credit
1-Apr-06 Pickup Truck $12,000.0
1-Apr-06 Display Equipment $6,000.0
1-Apr-06 Rototiller $400.0
1-Apr-06 Cash register $3,600.0
$22,000.0
Inventory
Date Desc Debit Credit
1-Apr-06 Inventory $60,000.0
31-Mar-07 Additional Inventory $200,000.0
$260,000.0
Expense
Date Desc Debit Credit
31-Mar-07 Rent Expenses (Monthly $600) $7,200.0
31-Mar-07 Telephone Expenses (Monthly $100) $1,200.0
31-Mar-07 Utility Expenses (Monthly $400) $4,800.0
$13,200.0
Payroll and Wages
Date Desc Debit Credit
31-Mar-07 Mary Jane Salary $40,000.0
31-Mar-07 Employee Wages $72,000.0
$112,000.0
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Date Desc Debit Credit
31-Mar-07 Advertising Expense $20,000.0
$20,000.0
Revenue
Date Desc Debit Credit
31-Mar-07 Sales $400,000.0
$400,000.0
 Receivable
Date Desc Debit Credit
31-Mar-07 Sales $60,000.0
$60,000.0
Cash
Debit Credit
$60,000.0
$32,000.0
$2,000.0
$6,000.0
$3,600.0
$400.0
$60,000.0
$13,200.0
$112,000.0
$4,032.0
$12,160.0
$340,000.0
$20,000.0
$200,000.0
$1,392.0
 Trial Balance 1-Apr-06
Cash $1,392.0
Common Stock $60,000.0
Loan $30,668.0
Interest $4,860.0
Equipment $22,000.0
Inventory $260,000.0
Expenses $13,200.0
Payroll & Wages $112,000.0
Advertisement $20,000.0
Revenue $400,000.0
Account Payable $60,000.0
$492,060.0 $492,060.0
 Projected Income statement for The Garden Palace (01Apr'06 to 31Mar'07)
Revenue: Expenses:
Product sale: Inventory
Cash $ 340,000 Salary & Wages
Account Receivable $ 60,000 Mary Janes Salary
$ 400,000 Employee Wages

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Interest on loan:
Initial loan $32,000 @13% for 1Year
Truck Loan

Expenses
Rent
Telephone
Utility

Total Revenue: $ 400,000 Total Expenses:

Income before Tax: -$ 10,059
Mar'07)

$ 260,000

$ 40,000
$ 72,000
$ 112,000
$ 20,000

$ 4,160
$ 699
$ 4,859

$ 7,200
$ 1,200
$ 4,800
$ 13,200
$ 410,059
 Balance Sheet as on 1Apr'07
Liabilities and Equity Assets
Common Shares $ 60,000 Cash -$ 1,392
Initial Loan(less Principal repay) $ 24,000 Closing Inventory $0
Truck Loan $ 6,667 Truck $ 12,000
Retained Earnings -$ 10,059 Display Equipment $ 6,000
Rototiller $ 400
Cash register $ 3,600
Account Receivable $ 60,000
Total Liabilities and Equity $ 80,608 Total Assets $ 80,608
1. Projected operating cost has not been provided. As there hasn't been utilization of inventory, although projected
purchase has been made twice. Without operating cost, the projected profit/loss is not determinable.
2. Depriciation for truck and
equipments has not been provided, which add to the expenses and impact projected profit/loss.
 although projected
nable.
n for truck and
.
 Break Even
Selling Price per Unit $10.0
Variable Cost per Unit $6.0
Contribution Margin per Unit= Selling Price per Unit−Variable Cost per Unit= $4.0
Contribution Margin Ratio= Selling Price per Unit/Contribution Margin per Unit= 40.0%
Breakeven Point (in sales revenue)= Fixed Costs/Contribution Margin Rato= $1,025,147.5