Construct an Income Statement and Balance Sheet from the information provided below.

a.First year sales will total $100,000

b.Gross margins will be 50%

c.Operating margins will be 20%

d.Accounts Receivables will be about 15% of sales

e.Inventory will be 12% of sales

f.Accounts Payable will be 5% of sales

g.Accrued expenses payable will be 7% of sales

h.The Bank of Connecticut will provide a loan of $30,000.The annual interest will be 8%, compounded annually.Interest only payments are needed - until the loan is due in 5 years, where a balloon payment for the full balance must be paid.

i.The combined federal and provincial tax rates will be 30%

j.Capital equipment purchases will be made at the start of the year.These will total $35,000.These will depreciate at 10% per year

k.D'Souza wants ending cash to be $24,500; he feels he needs this on hand at year-end

l.D'Souza will provide any other capital needed in the form of equity financing