TKD Woodworking – 1st Qtr 2020 Books

So with everything else going on in the world, I have continued my work with TKD Woodworking. At the end of the 1st qtr, I have:

  • Established the business legally in the state of NJ and with the IRS (an LLC, or limited liability corporation)
  • Created a separate bank account with credit card for the business (in order to keep the finances separate)
  • Build Four different items and determined labor/material costs
  • Created a basic website www.TKDwoodworking.com (its very rough and a work in progress)

Back in February I reviewed my basic financial documents to date (income statement, balance sheet and cash flows). With the first quarter done, I took the opportunity to review statements, to see what information I could draw from them.

Income Statement

Area1st Qtr 2020
Sales Revenue$0.00
Cost-of-Goods Sold Expense($249.18)
Gross Margin($249.18)
Operating Expenses($871.72)
Earnings before interest and Income Tax($1,120.90)
Interest Expense$0.00
Earnings before income tax($1,120.90)
Income Tax Expense$0.00
Net Income($1,120.90)

So I’ve spent $250 on materials (Wood, finish, etc) and $879 on Operating Expenses (Business registration, website, Travel and Training at a wood class, some equipment for shop). So far, all I’ve done in 3 months is spend money and time. However, that was the plan (my sales plan didn’t call for me to begin trying to sell product till 3rd qtr 2020). Still, lets hope the sales start coming in.

Balance Sheet

Assets
4/1/2020
Cash$2,812.39
Accounts Receivable$0.00
Inventories$283.70
Prepaid Expenses$0.00
Subtotal of current assets$3,096.09
Property, plants and equipment$0.00
Accumulated Depreciation$0.00
Cost less accumulated depreciation$0
Total Assets$3,096.09
Liabilities and Owner’s Equity
4/1/2020
Advanced payments from Customers$0.00
Accounts Payable$0.00
Accrued Expenses Payable$0.00
Short-term notes payable$0.00
Subtotal of current liabilities$0.00
Long-term notes payable$0.00
Total Liabilities$0.00
Owner’s Equity – invested capital$3,096.09
Owner’s Equity – retained earnings$0.00
Total Liabilities and Owner’s Equity$3,096.09

So I’ve got $3,096 in assets (mostly cash in the bank). The four finished items I am just assuming the cost of materials as their value at this time. Good cash position going into 2nd quarter

Cash Flow

Cash Flow from Operating Activities1st Qtr 2020
Cash collections from revenue$3,933.29
Cash payments for Expenses($1,120.90)
Total$2,812.39
Cash Flow from Investing Activities
Investments in new long-term operating assets$0.00
Cash Flow from Financing Activities
Increase in short-term notes payable$0.00
Increase in long-term notes payable$0.00
Issuance of additoinal capital stock shares$0.00
Cash distributions from profit to shareowners$0.00
Total$0.00
Net Increase of cash during year$2,812.39
Beginning Cash Balance$0.00
Ending Cash Balance$2,812.39

Started the quarter out with almost $4K in case for the business. I’ve got almost $3K left, but if my cash drops below $1.5K in my bank, they start charging me a monthly fee for the account, so I really only have about $1,300 left in cash. I have three other items I intend to manufacture prior to starting to sell, and the material costs for those are around $1,075. At that point, I’ll need to start selling items to fund additional manufacturing.

So we are off. I’m excited about the business, and learning about tracking the work. We will have to see how it goes.

Mr. 39 Months

2 thoughts on “TKD Woodworking – 1st Qtr 2020 Books”

    1. I agree. We’ll see how it goes. I’ve always heard that one of the things you have to deal with when turning your hobby into a business is that it stops being “fun” and becomes work. That is one of the reasons I’ve been documenting all the business related items involved with this – so folks can see that.

      I enjoy your blog

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