Garden Sales, Ix. December 31, 2017 Cash $3,000.00 Account Payable $ 29,146.00 Accounts Receivable $ 140,250.00 Working Capital Line $ Inventory $ 72,865.00 Accrued interest Payable 5 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) Retained Earnings $ 798,969.00 Net PP&E S 800,000.00 Total Assets $ 1,078,115.00 $ 1,078,115.00 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 $110,000, each month Sales for the following three months will increase by $2,100 each month, beginning January through April. Cost of Sales represents 65% of sales, each month. Cash Operating Expenses are 18% of sales, exclusive of Depreciation expense Depreciation Expense is $3,300, per month and prepaid rent is amortized at $1,500 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, $10,500 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 In March, the company is planning on replacing an outdated machine.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 $13,000, with a Net Book Value of $4,000 and will be sold for $6,000 The Company does not pay or accrue for taxes until the end of December. The Company plans to pay a cash dividend of $2,000 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 $8,000, plus interest of $1,500, 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. 1. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2018 2. Prepare an Income Statement for each period Jan-Mar 2018 (in good form) 3. Prepare a Balance Sheet as of March 31, 2018 (in good form) 4. Although you may use Excel, this assignment must be turned in as a HAND-WRITTEN document.