Millie’s Hand Crafts is a small business that specializes in producing hand-made decorations for Easter and
selling them over the Internet. The firm opens only for a few months around the holiday time. Last year after closing the season the firm hired a designer to develop new designs hoping that it would help them to increase the sales; it costed $7,000. This year Millie’s Hand Crafts was in business only in March, April, and May. In March, the firm bought all the required supplies for the production. The whole bill came up to be $60,000: half of it was paid immediately and another half – in April. All the production of decorations happened in March, while the sales occurred just before the holiday, in April. Millie’s Hand Crafts produced 500 items and sold them for $150 each. 1/3 of customers paid for their purchases immediately, and the rest of customers paid only in May. The corporate tax rate is 30%.
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