Accounts create cash budget, and pro forma income statement

. Expected revenues for the first two years are as follows. o Sales for the 1* quarter of Year 3 are projected at $1,150,000 Year 1 ('000s) Year 2 ('000s) 01 02 03 04 02 03 04 20.00 60.00 150.00 250.00 375.00 550.00 750.00 975.00 . Accounts receivable at the beginning of this expansion are $0. o Collection period = 30 days . Accounts payable at the beginning of the expansion are $0. o The Company quarterly purchases from suppliers = 30% of the next quarter's forecasted sales. o Suppliers are paid on average in 60 days. . General and administrative expenses (salaries, insurance, IT, utilities etc.) are estimated to be $7,500 in the 1* quarter of Year 1 and 15% of sales thereafter. . Sales salaries and commissions and advertising are estimated to be 12.5% of sales. . The company expects capital outlays in both Year 1 - Q1 of $175,000 and Year 1- Q3 of $175,000. . The expansion will start with an initial cash loan from the parent company of $350,000. Interest on this loan is $7,000 per quarter. The $350,000 will be paid back during Year 2 - Q4. . Interest on any additional short-term borrowing is expected to be 3% per quarter. . The Company wishes to maintain a $175,000 minimum balance at all times to best manage its working capital and any unexpected commitments. Using the above information complete Appendix A - BikesAreBetter Inc. Pro Forma Income Statement. Question #2 Using the following projections, and the template in Appendix- B, build a Cash Budget for the expansion