Bart Brock is thinking about starting his own company, BB’s. At the beginning of October 2000, he plans to invest $15,000 into the business. During October the company will purchase land, a small building to house the business, some office equipment, and some supplies. Bart has found land and a building that would be suitable for the company. The purchase price of both the land and the building is $50,000. Bart estimates that the cost of the land is 15% of the total price and the building is 85% of the total price. Bart wants the company to “finance” this purchase through its bank. The bank would require BB’s to make a 20% down payment and would also require the company to sign a mortgage for the balance. Bart has determined that there is too much land, however, so that if BB’s purchased the land and building, it would sell one-quarter of the land to another company to use as a parking lot. The other company has agreed to buy the land at a price equal to the cost paid by BB's and to sign a note requiring payment of this cost at the end of two years. Bart has found some used office equipment tiyat could be purchased by BB's for $2,500 on credit, to be paid in 60 days. He also expects that BB’s will need $800 of office supplies, which the company would purchase with cash. Before the bank will lend BB’s the money to buy the land and building, it has requested a “projected” balance sheet for the company, along with a “projected” current ratio and debt ratio as of October 31, 2000, based on the preceding plans. Bart Brock has asked for your help.

Required: (1) Using the preceding information, prepare a projected balance sheet, current ratio, and debt ratio for BB’s as of October 31, 2000. Show supporting calculations.
(2) Basing your decision solely on this information, if you were the banker would you give BB’s the loan? What other information would help you make your decision?