Busy Bee's Company has begun selling a honey and they want you to help them with next years budgeted financial statements. Using the worksheet below, complete Busy Bee's forecast and answer the questions which follow. Assumptions: To begin with, Busy Bee's are sure sales will grow 50% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage).

Assume that fixed expenses will remain unchanged and that $1,000 worth of new Fixed Assets will be obtained next year. Lastly, the current dividend policy will be continued next year. Busy Bee honey Company, Inc. Financial Forecast Estimated This year for next year Sales $10,000 ________ COGS 4,000 ________ Gross Profit 6,000 ________ Fixed Expenses 3,000 ________ Before Tax Profit 3,000 ________ Tax @ 33.3333% 1,000 ________ Net Profit $2,000 ________ Dividends $0 ________ Current Assets $25,000 ________ Net Fixed Assets 15,000 ________ Total Assets $40,000 ________ Current Liabilities $17,000 ________ Long term debt 3,000 ________ Common Stock 7,000 ________ Retained Earnings 13,000 ________ Total Liabs & Eq $40,000 ________ Amount need to balance the balance sheet ________ (Projected total assets minus projected total liabilities & equity *) * If this number is positive it means Busy Bee need additional external funding to finance their projected asset growth. If this number is negative it means Busy Bee have programmed too much financing for the amount of assets they project.