THE PIZZA FOOD TRUCK
THE PIZZA FOOD TRUCK
COMPANY LAUNCH ON DECEMBER 20th
On December 20th, I invest my savings in a new business:
Shareholder investment: $5,000
On December 22nd, I visit a supermarket to buy the ingredients I need:
Food supply: $750
I enjoy a nice Christmas break for now. I'm excited to begin operations on January 1st!
CASH FLOW STATEMENT
Cash beginning $0
Cash in
Share capital $5,000
Cash out
Food supply -$750
Cash end $4,250
BALANCE SHEET END OF THE MONTH
ASSETS LIABILITIES & EQUITY
Inventory $750 Share capital $5,000
Cash $4,250
Total assets $5,000 Total liabilities & equity $5,000
JANUARY
I rent a truck: $2,500
I sell: 500 pizzas
The selling price is: $10 /pizza (all customers pay in cash)
Besides the rental cost of the truck, I bear the following additional expenses:
Material cost: $1.50 /pizza (food bought in December)
Water & Electricity: $0.50 /pizza
PRODUCTION COST
Material cost $1.50 /pizza
Water & electricity $0.50 /pizza
Total $2.00 /pizza
INCOME STATEMENT CASH FLOW STATEMENT
Sales revenue $5,000 Cash beginning $4,250
- Cost of pizzas sold -$1,000 Cash in
- Truck rental cost -$2,500 Sales in cash $5,000
Monthly profit $1,500 Cash out
Water & electricity -$250
Truck rental cost -$2,500
Cash end $6,500
BALANCE SHEET END OF THE MONTH
ASSETS LIABILITIES & EQUITY
Inventory $0 Share capital $5,000
Cash $6,500 Profit January $1,500
Total assets $6,500 Total liabilities & equity $6,500
FEBRUARY
I rent a truck: $2,500
I go back to the supermarket to purchase some more food:
Food supply: $5,000
I sell: 1 000 pizzas to individual customers who all pay in cash
I closed a deal for: 2 000 pizzas with a neighbouring company (payment terms: 30 days)
The selling price is: $10 /pizza for all customers (individuals & the neighbouring company)
Besides the rental cost of the truck, I bear the following additional expenses:
Material cost: $1.50 /pizza (food bought at the supermarket earlier this month)
Water & electricity: $0.50 /pizza
Part-time employee: $1,000
PRODUCTION COST
Material cost $1.50 /pizza
Water & electricity $0.50 /pizza
Total $2.00 /pizza
INCOME STATEMENT CASH FLOW STATEMENT
Sales revenue $30,000 Cash beginning $6,500
- Cost of pizzas sold -$6,000 Cash in
- Part-time employee -$1,000 Sales in cash $10,000
- Truck rental cost -$2,500 Cash out
Monthly profit $20,500 Food supply -$5,000
Water & electricity -$1,500
Part-time employee -$1,000
Truck rental cost -$2,500
Cash end $6,500
BALANCE SHEET END OF THE MONTH
ASSETS LIABILITIES & EQUITY
Inventory $500 Share capital $5,000
Accounts receivable $20,000 Retained earnings $1,500
Cash $6,500 Profit February $20,500
Total assets $27,000 Total liabilities & equity $27,000
MARCH
I buy the truck for: $36,000 (to be paid half in March and half in April)
I will use the truck for: 3 years in total
I visit the supermarket once more to purchase food:
Food supply: $5,000
I sell: 1 000 pizzas to individual customers who all pay in cash
Plus: 2 000 pizzas to a neighbouring company (payment terms: 30 days)
The selling price will be: $10 /pizza for all customers (individuals & the neighbouring company)
I bear the following additional expenses:
Material cost: $1.50 /pizza (past inventory & food just bought at the supermarket)
Water & electricity: $0.50 /pizza
Part-time employee: $1,000
Truck insurance: $300
PRODUCTION COST
Material cost $1.50 /pizza
Water & electricity $0.50 /pizza
Total $2.00 /pizza
INCOME STATEMENT CASH FLOW STATEMENT
Sales revenue $30,000 Cash beginning $6,500
- Cost of pizzas sold -$6,000 Cash in
- Part-time employee -$1,000 Acc. Receivable collection $20,000
- Truck insurance -$300 Sales in cash $10,000
- Truck depreciation -$1,000 Cash out
Monthly profit $21,700 Truck purchase -$18,000
Food supply -$5,000
Water & electricity -$1,500
Part-time employee -$1,000
Truck insurance -$300
Cash end $10,700
BALANCE SHEET END OF THE MONTH
ASSETS LIABILITIES & EQUITY
Gross truck value $36,000 Share capital $5,000
- Acumulated depreciation -$1,000 +Retained earnings $22,000
Net truck value $35,000 +Monthly profit $21,700
Inventory $1,000 Owners' equity $48,700
Accounts receivable $20,000
Cash $10,700 Debt to truck supplier $18,000
Total assets $66,700 Total liabilities & equity $66,700
APRIL
I visit the supermarket to purchase food:
Food supply: $5,000
I sell: 4 000 pizzas to a neighbouring company
As of this month, new conditions apply when I'm doing business with this corporate customer:
Selling price: $10 /pizza (unchanged)
Payment terms: 60 days
I still use the truck bought in March to I run the operations and bear the following additional expenses:
Material cost: $1.50 /pizza
Water & electricity: $0.50 /pizza
Part-time employee: $1,000
Truck insurance: $300
PRODUCTION COST
Material cost $1.50 /pizza
Water & electricity $0.50 /pizza
Total $2.00 /pizza
INCOME STATEMENT CASH FLOW STATEMENT
Sales revenue $40,000 Cash beginning $10,700
- Cost of pizzas sold -$8,000 Cash in
- Part-time employee -$1,000 Acc. Receivable collection $20,000
- Truck insurance -$300 Sales in cash $0
- Truck depreciation -$1,000 Cash out
Monthly profit $29,700 Truck purchase (end) -$18,000
Food supply -$5,000
Water & electricity -$2,000
Part-time employee -$1,000
Truck insurance -$300
Cash end $4,400
BALANCE SHEET END OF THE MONTH
ASSETS LIABILITIES & EQUITY
Gross truck value $36,000 Share capital $5,000
- Acumulated depreciation -$2,000 +Retained earnings $43,700
Net truck value $34,000 +Monthly profit $29,700
Inventory $0 Owners' equity $78,400
Accounts receivable $40,000
Cash $4,400 Debt to truck supplier $0
Total assets $78,400 Total liabilities & equity $78,400
