I need help with 3 Finance questions. Pls. free to use Excel sheet and make sure you provide explainations

Pls. find the attached document with the questions. I would like to have the answers by y04/12(Wednesday)

1. Constructing Financial Statements from Cash Data Harry and Susan Byrd own the Hokie Arts and Crafts Company, a small arts and crafts business that operates a store on Main Street. The store sells a wide variety of items including paintings, pottery, jewelry and clothing made by local artists. The store accepts these items on consignment. After an item is sold, 75% of the sales price is remitted to the artist; thus, the store receives a 25% commission on all items sold. All items are sold on a strictly cash basis. Harry and Susan started the business on January 2, 2017. The business received a $15,000, 6% loan from the National Bank on January 2, 2017. Principal and interest on the note are due on January 2, 2018. Harry and Susan are the only \"employees\" of the business. They each earn $1,850 per month in wages. The business rents store space for $1,000 per month and incurs insurance costs of $500 per month. On January 2, 2017, the business purchased furniture and fixtures for the store. The furniture and fixtures were purchased from a local office supply for $8,000 on account. (The owner of the office supply store is friends with Harry and Susan and is not charging them interest.) The National Bank has requested financial statements for the quarter ended March 31, 2017; however, Harry and Susan are not sure how to prepare the financial statements. They have asked you for help in preparing them. They have kept the store's checking account up to date, so they provide you with the following complete listing of the cash receipts and cash disbursements for the quarter ended March 31, 2017. Cash Receipts Original investment by Harry and Susan McBryde Loan from National Bank Sales of arts and crafts Total cash receipts Cash Disbursements Payments to artists for sales made Payment of wages Payment of rent Payment of insurance Payment for furniture and fixtures Payment of miscellaneous operating expenses Total cash disbursements Cash balance, March 31, 2017 $ 10,500 15,000 116,000 141,500 76,000 7,400 6,000 6,000 1,000 900 97,300 $ 44,200 Additional information: 1. Harry and Susan have received a $400 invoice for March utilities. The invoice, which has not been paid, is due on April 10, 2017. 2. Harry and Susan have not paid income taxes. They anticipate that the tax rate will be 30%. 3. Assume the furniture and fixtures have an expected useful life of 10 years with no salvage value. Required: 1. Use the above information to prepare the income statement and balance sheet for Hokie Arts and Crafts Company for the quarter ended March 31, 2017. 2. Calculate ROA and ROE. What can you say about the company's performance during the quarter? (ROA=(Net Income+After tax interest expense)/Total Assets and ROE=Net Income/Total Equity) 2. Interpreting Footnote Disclosure for Investments Madison, Inc. included the following summary of its investments in fixed maturity and equity securities in the footnotes to its 2016 financial statements: 1 December 31, 2016 ($ thousands) Fixed maturity securities available for sale: Corporate and other bonds States, municipalities and political subdivisions Commercial mortgage-backed U.S. Treasury and obligations of government-sponsored enterprises Foreign government Total fixed maturity securities availablefor-sale Total fixed maturity securities trading Equity securities: Common stock Preferred stock Total equity securities Total Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimate d Fair Value $19,080 $1,846 $164 $20,762 8,018 1,255 7,500 40 116 58 15,402 1,237 481 608 14 30 - 495 638 29,442 9,430 338 38,534 7 1 - 8 335 210 545 29,994 117 11 128 9,559 42 5 47 385 410 216 626 $39,168 Required: Use the above table to answer the following questions. (Ignore taxes.) 1. What amounts would be reported on Madison's 2016 balance sheet for investments in fixed maturity securities available-for-sale, investments in fixed maturity securities trading and investments in equity securities? 2. How are unrealized gains and/or losses reflected in Madison's 2016 balance sheet and income statement? 3. Assume that Madison sold all of its investments in common stock on February 15, 2017 for $515,000. What effect would this transaction have on Madison's balance sheet, income statement and statement of cash flows? 3. Leases Question Assume that Leland Manufacturing Company leases equipment for $950,000 per year. Leland has agreed to lease the equipment for 5 years. Payments are made at the end of the year and the company's incremental borrowing rate is 5%. The estimated useful life of the equipment is 5 years and the equipment has no salvage value. (Ignore taxes.) Required: 1. Assume that the equipment lease is NOT capitalized. (Assume it is a series of short-term leases.) What is the effect of the lease on Leland's income statement, balance sheet and cash flows for the 5-year period. 2. Assume that the equipment lease is capitalized. (Assume it is a Finance/Capital lease.) What is the effect of the lease on Leland's income statement, balance sheet and cash flows for the 5year period. Show your calculations. 2