business 101

1. Today corporations are required to send their stockholders an annual report.  Assume that you are a prospective investor trying to decide if you should invest in a specific corporation. What type of information is contained in an annual report that would help you decide if this is the right investment for you?  Give reasons why this information is important to you.  Please be specific.

2.  Assume that you are going to open up a lemonade stand.  You have savings in cash of $100 to begin your venture.  You must pay for everything used in the operation of your business. Clearly, you'll want to allocate monies towards marketing your business i.e. signs, pens etc.  Create a simple fictitious income statement that reflects your profit and/or loss after your first month of operation.  Use the format shown on page 454 of your textbook. Be sure to include the following:  Revenues, cost of goods sold, gross profit, operating expenses and net income before taxes.  Include only those expense categories that you use during the course of business.  (In other words, do not list an expense category that has a zero balance!)

write a well-supported paragraph for the question.