i completed my income statement but having trouble with my Balance sheet specifally how to figure out cash

Case Overview

Janelle Higgins has decided to start her own event planning business (JH Events) in the upcoming year. She believes that she has an innovative business model and is seeking a business loan. Therefore, Janelle is in the process of putting together a business plan. As part of her business plan, Janelle must include forecasted financial statements for the first 5 years. The forecasted financial statements to be included are: Income Statement, Balance Sheet, and Statement of Cash Flows. Janelle must also include a set of calculated ratios along with an overall assessment on the projected health of the company.

Forecasting Assumptions

• First year sales are projected to be $150,000 and grow 3% for the next two years and 5% in year 4 and 5.
• Cost of sales are projected to be 45% of revenue in the first year and is expected to grow at the same rate as sales.
• Advertising expenses are projected to be 4% of each years projected revenue.
• Janelle will need to rent equipment for the events she puts on. She has an agreement with a rental company for a flat rate of $500 per month and is sufficient to cover all of her estimated events. Starting in Year 3, she expects to be able to handle more events and the rental rate will increase to $750 per month.
• Janelle plans to start off by hiring 2 people to work the events with her. Each person will be paid $100 per event and is expected to work 4 events per month. After Year 3, Janelle plans to hire 2 additional people. (At this point, each person will be paid $100 per event and is expected to work 3 events per month).
• Office rent is estimated to be a flat rate of $1,200 per month.
• Utilities for the rented office space are estimated to be $300 per month.
• The office space Janelle plans to rent is unfurnished. She plans to purchase $15,000 worth of furniture and fixtures at the beginning of Year 1. The furniture and fixtures will have a useful life of 15 years. Janelle will also need to buy some computers and other office equipment that she will purchase for $10,000 also at the beginning of Year 1. The office equipment will have a useful life of 5 years. Both the furniture and fixtures as well as the equipment will be depreciated on a straight-line basis (Assume zero salvage value for calculations). HINT: Fixed Assets Accumulated Depreciation = Net Fixed Assets
• Janelle is asking for a 3-year bank loan for $60,000 to be funded on Day1 of Year 1. The estimated interest on the loan is 3% (assume simple interest). She will pay the loan back in $20,000 installments starting in Year 2. Interest is due at the end of each year and paid in January of the following year. (Assume interest is paid on the principal balance still outstanding at year-end).
• The tax rate for JH Events is 35%. Taxes for the year just ended are paid in the first quarter of the following year.
• Janelle will invest $30,000 of her own money and from family and friends, before the beginning of the year, to start the business. This $30,000 investment of capital is also the beginning bank balance of Year 1.
• Schedule of expected year-end balances of selected accounts:

	Year 1	Year 2	Year 3	Year 4	Year 5
Accounts Receivable	10,000	12,000	8,000	6,000	10,000
Accounts Payable	2,000	4,000	5,000	6,000	9,000
Customer Deposits	1,500	2,000	3,000	4,000	5,000

• At the end of Year 2, Janelle will purchase an insurance policy to help cover the business. The policy has a term of 3 years and coverage starts at the beginning of Year 3. The policy costs $12,000.
• During Year 3, Janelle plans to personally invest $10,000 of additional capital into the business.

A B D F E FORECASTED INCOME STATEMENT YEAR 1 150,000 67,500 82,500 YEAR 2 154,500 69,525 84,975 YEAR 3 159,135 71,611 87,524 YEAR 4 167,092 75,191 91,900 YEAR 5 175,446 78,951 96,495 Revenue Cost of Sales Gross Margin Operating Expenses Advertising Equipment Rental Wages Office Rent Utilities Insurance Expense Depreciation Operating Income Interest Expense Income before taxes Income taxes Net Income 6,000 6,000 9,600 14,400 3,600 6,180 6,000 9,600 14,400 3,600 6,365 9,000 9,600 14,400 3,600 4,000 3,000 37,559 600 36,959 12,936 24,023 6,684 9,000 14,400 14,400 3,600 4,000 3,000 36,817 7,018 9,000 14,400 14,400 3,600 4,000 3,000 41,078 3,000 39,900 1,800 38,100 13,335 24,765 3,000 42,195 1,200 40,995 14,348 26,647 36,817 12,886 23,931 41,078 14,377 26,700 B D A E F G H 2 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 101,400 10,000 8,000 6,000 10,000 12,000 12,000 24,000 13000 6,000 43,000 111,400 14000 8,000 133,400 10,000 10,000 8,000 12,000 4,000 24,000 6,000 11,000 2,000 19,000 20,000 3 4 Assets 5 Cash 6 Accounts Receivable 7 Prepaid Insurance 8 Current Assets 9 Furniture & Fixtures (net) 10 Equipment (net) 11 Total Assets 12 13 Liabilities 14 Accounts payable 15 Customer deposits 16 Interest payable 17 Taxes payable 18 Current Liabilities 19 Bank loan 20 Total Liabilities 21 22 Stockholder's Equity 23 Capital 24 Retained Earnings 25 Total Stockholder's Equity 26 Total Liabilities & Stockholder's Equity 27 6,000 4,000 9,000 5,000 2,000 1,500 1,800 13,335 18,635 60,000 78,635 4,000 2,000 1,200 14,348 21,548 40,000 61,548 5,000 3,000 600 12,936 21,536 20,000 41,536 12,886 22,886 14,377 28,377 22,886 28,377 30,000 24,765 54,765 133,400 26,647 26,647 88,195 10,000 24,023 34,023 75,559 23,931 23,931 46,817 26,700 26,700 55,077 A B D F E FORECASTED INCOME STATEMENT YEAR 1 150,000 67,500 82,500 YEAR 2 154,500 69,525 84,975 YEAR 3 159,135 71,611 87,524 YEAR 4 167,092 75,191 91,900 YEAR 5 175,446 78,951 96,495 Revenue Cost of Sales Gross Margin Operating Expenses Advertising Equipment Rental Wages Office Rent Utilities Insurance Expense Depreciation Operating Income Interest Expense Income before taxes Income taxes Net Income 6,000 6,000 9,600 14,400 3,600 6,180 6,000 9,600 14,400 3,600 6,365 9,000 9,600 14,400 3,600 4,000 3,000 37,559 600 36,959 12,936 24,023 6,684 9,000 14,400 14,400 3,600 4,000 3,000 36,817 7,018 9,000 14,400 14,400 3,600 4,000 3,000 41,078 3,000 39,900 1,800 38,100 13,335 24,765 3,000 42,195 1,200 40,995 14,348 26,647 36,817 12,886 23,931 41,078 14,377 26,700 B D A E F G H 2 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 101,400 10,000 8,000 6,000 10,000 12,000 12,000 24,000 13000 6,000 43,000 111,400 14000 8,000 133,400 10,000 10,000 8,000 12,000 4,000 24,000 6,000 11,000 2,000 19,000 20,000 3 4 Assets 5 Cash 6 Accounts Receivable 7 Prepaid Insurance 8 Current Assets 9 Furniture & Fixtures (net) 10 Equipment (net) 11 Total Assets 12 13 Liabilities 14 Accounts payable 15 Customer deposits 16 Interest payable 17 Taxes payable 18 Current Liabilities 19 Bank loan 20 Total Liabilities 21 22 Stockholder's Equity 23 Capital 24 Retained Earnings 25 Total Stockholder's Equity 26 Total Liabilities & Stockholder's Equity 27 6,000 4,000 9,000 5,000 2,000 1,500 1,800 13,335 18,635 60,000 78,635 4,000 2,000 1,200 14,348 21,548 40,000 61,548 5,000 3,000 600 12,936 21,536 20,000 41,536 12,886 22,886 14,377 28,377 22,886 28,377 30,000 24,765 54,765 133,400 26,647 26,647 88,195 10,000 24,023 34,023 75,559 23,931 23,931 46,817 26,700 26,700 55,077