Build GAAP-compliant (Income Statment, Balance Sheet, Statement of Cash Flows) 3-year pro forma projections for Scuba Aruba, a US company arranging diving trips to Aruba. Scuba Aruba arranges luxury dive trips for diving fanatics, for which Scuba Aruba is paid a fee by tour companies and hotels. The divers still have to pay their own airfare, hotel, food and pay the dive companies in Aruba directly.

Use Excel only to complete your solution. Turn in the Excel spreadsheet properly formatted, with the paragraph of your analysis.

Assumptions:

1. 50 trips at $2500 will be arranged in 2017, and trips will increase 50% in Year 2 and 75% in Year 3 over Year 2. Trip selling prices will go up 10% every year.

2. You, as owner of Scuba Aruba, Inc. will take an annual salary of $50,000 and project annual 2% raises.

3. Salaries and wages are $30,000 for each employee, one employee in Year 1, and the number of additional full-time employees will rise proportionately with number of trips sold.

4. FICA and health insurance are 35% of all wages.

5. The office rent will be $2,000 per month in Years 1 & 2. In Year 3, you will take the unit next door, doubling the rent.

6. ULB (Underwater Lending Bank) will lend Scuba Aruba in increments of $10,000 at 8% interest based on year-end balances.

7. You will put up $100,000 to start Scuba Aruba from your savings.

8. Computers cost $2,000 per employee; you and each employee needs one.

9. Phone system costs $10,000, one time.

10. Furniture costs $20,000, one time, and then another $10,000 when you expand office.

11. Office expenses are $1000 per month.

12. Marketing is estimated at 40% of sales in Year 1, 30% in Year 2 and 25% in Year 3.

13. Depreciation is Straight-Line over 10 years with $0 salvage value.

14. Tax rate is 25%. As a C Corp, Scuba Aruba can utilize NOL carry-forwards.

15. Office expenses are paid two months in arrears.

16. Per lending covenants and as good business practice, Scuba Aruba must keep $15,000 in cash on hand at all times.