1) Suppose you own cupcake shop in Denton. You have annual sales of $250,000. You know from reviewing the RMA statement studies that operating expenses are 40% of annual sales. You also know that your business has general expenses of $50,000. What would you earn in profit before taxes?

2) Suppose you are given the following information. Your beginning inventory in 1/1/2013 is $100,000. You purchased an additional $50,000 during 2014. Your ending inventory on 12/31/2013 is $30,000. What is the cost of goods sold?

3) You are in the process of creating your financial statements. Suppose you buy a new piece of equipment, for which you pay a $2000 down-payment and finance the remaining $5000 on a 5-year note. What will happen to the balance sheet?