3.The Horizon Diner began business exactly one week ago when Seymour and Joan obtained permission from the college's business manager to rent a previously vacant portion of the Student Union Building. At the end of the first week, the following information was available:
a.Rent of $200 had been paid to the college to rent the space for the first week.
b.Specialty and variety breads had been purchased at a cost of $220. All had been used.
c.An ad was run in the student newspaper announcing the grand opening. It had cost $60.
d.Seymour and Joan took in $1,750 from sales of sandwiches.
e.Condiments (mustard, mayo, etc.) costing $100 had been purchased and used.
f.Rental of uniforms and purchase of napkins, plastic knives, and forks totaled $155 the first week. All supplies were used up that first week.
Required:
Prepare a profit report for the first week of business.
4.At the beginning of the summer season, you used $10,000 of your savings to open a booth on the boardwalk of a popular seaside resort. Your business sold the usual tourist items including T-shirts, suntan oil, sunglasses, pennants, trinkets, etc. During the season, you purchased goods for resale costing $25,000. Other costs included $6,000 for rental of space, $6,500 for hired help, $1,400 for promotional activities, and $300 for electricity. You did the buying and supervised employees, but otherwise, played on the beach. Sales during the season totaled $45,000.
Required:
a.What was the profit of your business for the summer?
b.What was the return on investment of your business?
c.Thinking as a businessperson, identify the two primary choices you have regarding how you might utilize the profits your business has created.