Garden Sales, ne December 31, 2017 26.520.00 Cach Accounts Receivable Inventory Prepaid font 5 $ 5 5 50,000.00 127.500.00 65,100.00 12,000.00 Account Payable Working Capital Line Acered interest Payable Not Payable $ $ $ 5 50.000.00 5 $ 200,000.00 27.050.00 Common stock Retained aming Prop Plant Equip Accum Depe 5 5 Net PPES 900,000.00 (100,000.00) 500.000.00 Total Asset $ 1.054.600.00 5 1.054.600.00 . . . . - . - You are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and carings 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 $2,000 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 $3,500 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, $10,000 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 In March the company is planning on replacing an outdated machine.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 $20,000. 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 $4,500 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 $15,000, 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 $100,000, and if needed, money is taken out at the beginning of the month. Interest is X % 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 (good form) 3. Prepare a Balance Sheet as of March 31, 2018 (good form) Assignment must be turned in as HAND WRITTEN document. Check Figures for 03/31 Net Income: (3mo) $39,918.50 Total Assets: $1,084,800 . . . Garden Sales, Inc December 31, 2017 26.520.00 Cash Accounts Receivable Inventory Prepaid Rent 5 $ 5 $ 50,000.00 127,500.00 65,100.00 12,000.00 Account Payable Working Capital Line Accrued interest Payable Note Payable $ $ $ 5 50,000.00 Prop. Plant & Equip Accum Depr 5 5 Net PPES 900,000.00 100,000.00) 800,000.00 $ $ Common Stock Retained Earnings 700,000.00 771,080.00 Total Assets $ 1,054,600,00 $ 1.054, 600.00 - . . . . . . 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 $100,000, each month Sales for the following three months will increase by $2,000 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 $3,500, 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, $10,000 from Nov A/R Sales will be written oft 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 $20,000. 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 $4,500 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 $15,000, 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 $100,000, 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 (good form) 3. Prepare a Balance Sheet as of March 31, 2018 (good form) 4. Assignment must be turned in as HAND WRITTEN document. Check Figures for 03/31 Net Income: (3mo) $39,918.50 Total Assets: $1,084,800