Acme Software is the developer (software) of an ERP software. It sells the software to customers along with consulting service to deploy the software. The following is their balance sheet as of 12/31/2009. Acme Software Dec 31, 2009 Assets Cash 100,000 Software Dev. Costs 500,000 Accum Amortization -200,000 Total Assets 400,000 Liabilities 0 Equity Common Stock 100,000 Retained Earnings 300,000 Total Equity 400,000 Total Liabilities & Equity 400,000 Katie Rapid, the sole shareholder of Acme will fund any cash short falls herself as a loan to the company. Interest will be 6%. Katie wants to be paid back if cash is available. Monthly interest payments are required. The company's policy is to maintain a cash balance of at least $10,000 at month end. Acme Software closed 3 software sales on Dec. 31, 2009 as described below: 1. The customer is ABC Corp. - Acme sold a $50,000 software to ABC. The revenue will be recognized in Jan. 2010 although ABC will pay Acme in $10,000 increments per month until it is fully paid. Acme will also provide ABC with 100 hrs of consulting services per month billed at the rate of $150 per hour over the next 5 months. Acme will assign Jane Quick to thiscustomer. Jane is only paid when she is working on customer projects. She is paid $75 perhour. Payroll tax expense is 10%. The consulting services will be paid on Net 30 terms. However Jane is paid immediately. 2. The customer is KLM Corp. - Acme sold a $60,000 software to KLM. The revenue will be recognized in Jan. 2010 although KLM will pay Acme in $10,000 increments per month until itis fully paid. Acme will also provide KLM with 80 hrs of consulting services per month billed at the rate of $175 per hour over the next 6 months. Acme will assign Mary Fast to thiscustomer. Mary is only paid when she is working on customer projects. She is paid $80 perhour. Payroll tax expense is 10%. The consulting services will be paid on Net 45 terms. However Mary is paid immediately. 3. The customer is XYZ Corp. - Acme sold a $100,000 software to XYZ. The revenue will be recognized in Jan. 2010 although XYZ will pay Acme the entire $100,000 in June. Acme willalso provide XYZ with 60 hrs of consulting services per month billed at the rate of $200 perhour over the next 6 months. Acme will assign Gloria Swift to this customer. Gloria is onlypaid when she is working on customer projects. She is paid $100 per hour. Payroll tax expense is 10%. The consulting services will be paid on Net 30 terms. However Gloria y is paid immediately. Software development cost is amortized at the rate of $10,000 per month. SG&A is $5,000 per month. 40% of SG&A is paid in the current month and the reminder is paid net 30. California income tax rate is 9%. However, it is deductible in calculating federal income tax. The federal income tax rate is 28%. Create pro-forma income statements, balance sheet and statement of cashflows using the indirect method for the first 6 months of 2010. I know i must entries, but i dont even know where to even start with those either