Dusty and Sandy got your name through a friend of a friend. Dusty has been assured that although you are studying for your business admin degree, you are not a "suit". So willing to talk to you. they are You visit Dusty and Sandy. They give you their September 30, 2018 financial statements. You ask a series of questions and learn the following: Landscape maintenance revenue is projected to grow @5% per year. Landscape construction revenue is very hampy so Dusty wants to be conservative and keep it flat Landscape design work will grow at 5% per year as well. No change in margin is expected. Sales and marketing expense, engineering, and general and administrative (SG&A) expenses are all expected to grow at 3% per year. Field sales people are paid on straight commission at 5% of job revenue. Depreciation on the fixed assets on hand now runs about $115,152 per year (depreciate over the next five years). Dusty expects to buy about $15K per year in new equipment for the maintenance business, $15K per year in new equipment for the construction business, and $7.5K per year in new office equipment per year. The new maintenance and construction equipment will be depreciated per books over 7 years. The new office equipment will be depreciated per books over 3 years. The new equipment will be funded out of current cash flow. Dusty is tired of people from the equipment leasing company constantly looking over his shoulder. The current equipment loans require fixed payments the total of which is $50K per year. The implied interest rate on the equipment leases is 12% The current bank loan requires fixed monthly principle payments totaling $75K per year plus accrued interest @9.75% The state income tax rate is 6% and the Federal tax rate is 25% (State taxes are deductible for Fed tax calculations.) Due to the recent changes in the tax law, Dusty and Sandy (who own all the stock) will have Rhodes start paying a dividend of $1 per share per year. Deposits, long term assets and current liabilities are all flat Current payables construction and other are to be paid down $17,500 per year each year. Required (1) Complete the income statement by building on the FY18 results out over the next 5 years. a. Complete the amortization tables for both the equipment leases and the loan to get the interest expense and complete the depreciation table for the fixed assets to get depreciation expense. the b. Spread the numbers on the income statement following Dusty's estimates. (Suggestion the income statement (1b) should be done on the same tab as la so the year columns line up. This will help in working the relationships among the financial statements) Spread the numbers on the balance sheet. A/R landscape maintenance should be kept at 50 days. A/R landscape construction should be kept at 55 days. A/R landscape design should be kept at 35 days Inventory of materials for the landscape maintenance and landscape construction segments of the business is not a major factor in this business. Dusty tries to keep the inventory at 14 days (26 At this point, the balance sheet can be completed, as the "cash" number is a plug to balance (Hint: know liabilities and equity and all other asset balances.) Use the end of the period ratio formulation not beginning and ending averages although you have that date. Spread the numbers on the cash flow statement. (This format roughly follows the "Indirect method" of the text.) Hook the ending cash balance on the cash flow statement to the cash (2). The balance sheet should now balance. he balance shee SUC