Garden Sales, Inc. December 31, 2017 Account Payable Cash $ 50,000.00 Accounts Receivable $ 127,500.00 Working Capital Line Inventory 65,812.50 Accrued Interest Payable Prepaid Rent ssss S 26,325.00 S 12,000.00 Note Payable S 50,000.00 Prop, Plant & Equip S 900,000.00 Accum Depr $ (100,000.00) Common Stock Retained Earnings S $ 200,000.00 778,987.50 Net PP&E S 800,000.00 Total Assets S 1,055,312.50 $ 1,055,312.50 re the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings t/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with rious departments, you have come up with the following information/assumptions: lovember 2017 and December 2017 sales were $100,000, each month ales 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 of n 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 cashm n 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 In March, the company is planning on replacing an outdated machine.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 machin with a Net Book Value of $2 Garden Sales M. December 31, 2017 Cash $ 50,000.00 Account Payable $ 26.325.00 Accounts Receivable 127,500 00 Working Capital Line 5 Inventory $ 65.812.50 Prepaid Rent S 12.000.00 Accrued Interest Payable Note Payable S 50,000.00 Prop, Plant & Equip $ 900.000.00 Accum Depr $ 100,000.00) Common Stock Retained Earnings 200,000.00 778,987.50 Net PPAE S 800,000 00 Total Assets $ 1.055312.50 5 1.055 312.50 You are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings budget/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with the 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, 4 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 1. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2018 2. Prepare an Income Statement for the 3-month period ending March 2018 (in good form) 3. Prepare a Balance Sheet as of March 31, 2018 (in good form) 4. 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