Case #4: Mountain Mania Ryder has been working out of his garage making and selling high quality BMX bikes. He has been selling them for $495 each. The cost to produce the bikes average $325.00 each. He would like to move into a larger building and has estimated that he would have the following expenses: Utilities average $1150 per month, Insurance is $2,650 per year, vehicle gas averages $95 per month, phone and internet is $275 per month and rent is $2,000 per month (5-year lease). Vehicle license and other fees are $795 per year. In addition, Reid has a budget for tools at $85 per month. Last year Ryder sold 547 bikes. By moving into a larger building, he expects to have part-time help is $7,800 per year. Ryder has the following assets, miscellaneous parts $9,550, tools $4,800 delivery/service truck $22,000 He will need to purchase office equipment, display racks, computers, phones at $19,000 and he expects to have an inventory of 80 bikes. He is requesting a five-year loan. The loan amount requested is $50,000 with an Interest rate of 6.5%. He has accumulated depreciation is in the amount of $15,000. Operating Cash is $10,000, Cash in savings of 35,000. His tax rate is 24% His depreciation expenses run $2,000 per year. Ryder averages $4,500 in accounts receivable and $2,500 in accounts payable. Ryder operates as a sole proprietorship called Mountain Mania. ASSIGNMENT: Complete the following: 1. Construct in good form an income statement. What is the profit for Mountain Mania? 2. Develop a balance sheet for Mountain Mania. 3. Calculate the breakeven amount in dollars for Mountain Mania for the current year (do not include depreciation or taxes). How many bikes must be sold to meet the breakeven amount? 4. Using the income statement and balance sheet you developed for Mountain Mania calculate the following ratios: Profit margin, Return on Assets, Average Collection Period, Total Asset Turnover, Current Ratio, Quick Ratio, and Times Interest Earned. In a report of approximately 500 words analyze the ratios and explain how you think Mountain Mania is doing? 5. Develop a projected income statement that shows how many bikes Mountain Mania must sell to make a before tax profit of $30,000 and for $50,000? Is it feasible based on is current sales for him to make a profit of $30,000 or $50,000? Explain. 6. Using the information provided in the case study analyze Mountain Manias business. Is it making a profit? ***NOTE*** Your submission must be in a single Word document. You will need to insert your spreadsheets into the document.