Here are all the questions for it to make sense , Questions 8,9 and 10 Thanks

8. This and the following two problems demonstrate that pro forma forecasts, cash budgets, and cash flow forecasts all yield the same esti- mated need for external financingprovided you dont make any mis- takes. For problems 8, 9, and 10, you may ignore the effect of added borrowing on interest expense.

The treasurer of Pepperton, Inc., a wholesale distributor of house- hold appliances, wants to estimate his companys cash balances for the first three months of 2012. Using the information in the following chart, construct a monthly cash budget for Pepperton for January 2012 through March 2012. Does it appear from your results that the treasurer should be concerned about investing excess cash or looking for a bank loan?

Pepperton Selected Information
Sales (20% for cash, the rest on 30-day credit)
2011 Actual
October	$360,000
November	420,000
December	1,200,000
2012 Projected
January	$600,000
February	240,000
March	240,000
Purchases (all on 60-day terms
2011 Actual
October	$510,000
November	540,000
December	1,200,000
2012 Projected
January	$300,000
February	120,000
March	120,000
Wages payable monthly		$180,000
Principal pyt on debt due march		90,000
Interest due march		90,000
Dividend payable in March		300,000
Taxes payable in february		180,000
Addition to accum. Deprec March		30,000
Cash balance on Jan.1 2012		300,000
Minimum desired cash Balance		150,000

Forecasting, Budgeting, and Projecting Requirements

9. Continuing problem 8, Peppertons annual income statement and bal- ance sheet for December 31, 2011, appear next. Additional information about the company's accounting methods and the treasurer's expecta- tions for the first quarter of 2012 can be seen in the footnotes.

Pepperton Annual Income Statement
December 31,2011 ($thousands)
Net sales		$6,000
Cost of goods sold (1)		3,900
Gross profits		2,100
Selling & admin expenses (2)		1,620
Interest expense		90
Depreciation		90
Net profit before tax		3,000
Tax (33%)		99
Net profit after tax		$201
BALANCE SHEET
December 31,2011 ($ thousands)
ASSETS
Cash			$300
Accounts receivable			960
Inventory			1,800
Total current assets			3,060
Gross fixed assets			900
Acculated depreciation			150
Net fixed assets			750
TOTAL ASSETS			3,810
LIABILITIES
Bank loan			$0
Accounts payable			1,740
Miscellaneous accruals (4)			60
Current portion long term debt	term debt(5)		210
Taxes payable			300
Total Current Liabilities			2,310
Long term debt			990
Share holders equity			510
Total liabilities & equity			$3,810
foot notes
(1) Cost of goods sold consists items purchased in 1st quarter
(2) Selling and admin expenses consist entirely wages
(3) Depreciation is at the rate of $30k per quarter
(4) Miscelaneous accruals are expected to in 1st quarter
(5)$210 due March 2012. No pyts for remainder of year
a. Use this information and the information in problem 8 to con- struct a pro forma income statement for the first quarter of 2012 and a pro forma balance sheet for March 31, 2012. What is your es- timated external financing need for March 31? b. Does the March 31, 2012, estimated external financing equal your cash surplus (deficit) for this date from your cash budget in prob- lem 8? Should it? c. Do your pro forma forecasts tell you more than your cash budget does about Peppertons financial prospects? d. What do your pro forma income statement and balance sheet tell you about Peppertons need for external financing on February 28, 2012? 10. Based on your answer to question 9, construct a first-quarter 2012 cash flow forecast for Pepperton.