Garden Sales, Inc. December 31, 2017 Cash $ 40,000.00 Account Payable $ 23.592.00 Accounts Receivable $ 105,000.00 Working Capital Line $ Inventory $ 58,980.00 Accrued interest Payable Prepaid Rent $ 12,000.00 Note Payable $ 50,000.00 Prop, Plant & Equip 900,000.00 Common Stock $ 200.000.00 Accum Depr $ (100,000.00) Net PP&E $ 800,000.00 Retained Earnings $ 742,388.00 Total Assets $ 1,015.980.00 $1,015,980.00 ou are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings udget/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with e 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 decrease by $1,700 each month, beginning January through April. Cost of Sales represents 60% of sales, each month. Cash Operating Expenses are 11% of sales, exclusive of Depreciation expense Depreciation Expense is $4,200, per month and prepaid rent is amortized at $600 per month Of the month's sales, 30% 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, $13,000 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 In March, the company is planning on replacing an outdated machine.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 $60,000. The old machine originally cost $15,000, with a Net Book Value of $4,000 and will be sold for $1,900. The Company does not pay or accrue for taxes until the end of December. The Company plans to pay a cash dividend of $7,500 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 $8,000, plus interest of $600, at the end of March. For this note, no interest is Accrued/Expensed until interest is paid The minimum cash month end balance required according to the bank agreement is $60,000 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. 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 Total Interest Exp: (3mo) $764.88 Total Equity: $988,665.12