Cash 5 50,000.00 Account Payable 26,325.00 Accounts Receivable S 127,500.00 Working Capital Line $ Inventory $ 55,812.50 Accrued interest Payable $ Prepaid Rent S 12,000.00 Note Payable S 50,000.00 Prop, Plant & Equip S 900,000.00 Common Stock S 200,000.00 Accum Depr S (100,000.00) Retained Earnings S 778.987.50 Net PP&E S 800,000.00 Total Assets $ 1.055,312.50 5 1.055,312 50 u are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings get/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with various departments, you have come up with the following information/assumptions: November 2017 and December 2017 sales were $100,000, each month Sales for the following three months will increase by $1,250 each month, beginning January through April. Cost of Sales represents 65% of sales, each month. Cash Operating Expenses are 14% of sales, exclusive of Depreciation expense Depreciation Expense is $3,100, per month and prepaid rent is amortized at $1,000 per month Of the month's sales, 15 % is collected as cash with the remaining placed on customer's account. Customer's accounts are usually paid off over a 2 month period (50% each month) beginning the month following the sale The CFO just informed you that one customer has filed bankruptcy therefore, $8,500 from Nov A/R Sales will be written off in Jan to Bad Debt Exp. To maintain sufficient inventory, the company purchases 100% of the next month's cost of sales. They pay for 60%, in cash, in the month they purchase and pay the remaining 40% in the following month. In March, the company is planning on replacing an outdated machine. The new machine will cost $30,000. The old machine originally cost $12,000, with a Net Book Value of $2,000 and will be sold for $1,500 The Company does not pay or accrue for taxes until the end of December. The Company plans to pay a cash dividend of $4,000 at the end of March. Assume all operating expenses incurred during the month are paid, in cash, during the same month incurred The Note Payable requires a principal payment of $12,000, plus interest of $1,100, at the end of March. For this note, no interest is Accrual/Expense until interest is paid The minimum cash month end balance required according to the bank agreement is $65,000 for any given month beginning Jan 30, 2018. A working capital line of credit is available, up to $25,000, and if needed, money is taken out at the beginning of the month. Interest is % % per month. Interest is paid on the working capital line when principal payments are paid on the debt; at the end of any given month. Interest is accrued on the working capital line effective the beginning of the month when money is received. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2018 Prepare an Income Statement for the 3-month period ending March 2018 (in good form) Prepare a Balance Sheet as of March 31, 2018 (in good form) Assignment must be turned in as HAND WRITTEN document and include this sheet. Check Figures for 03/31 Net Income: (3mo) $42,085.75 Net PP&E: $818,700.00