INSTRUCTIONS: Using the 2022 trial balance and additional information below, prepare the projected (2023) financial statements for Walnut Grove. The prior year data (provided) is the starting point for your projections, and then each of the assumptions listed below will also be used. Prepare an Excel workbook which contains the following information: - Tab 1: 2022 Trial Balance (provided in this document) - Tab 2: 2023 Projected Income Statement - Tab 3: 2023 Projected Balance Sheet - Tab 4: 2023 Projected Statement of Cash Flows Assumptions: 1. Sales will change as follows: a. Material \& Supplies Sales will increase 6% b. Small Tool Sales will increase 3% c. Tool Rental Revenue will continue throughout the 2023 year. An average of 18 tools will be rented each week, at an average of $75 per week. 2. Vendor compensation will increase consistently with Material \& Supplies Sales and Small Tools Sales. 3. Cost of sales for materials and supplies and small tools will increase proportionately based on their current percentage of sales, respectively. (HINT: You will need to use vertical analysis.) 4. Small tools, including blades and other items, will be expected, and are expected to total $7,900 in 2023. 5. Office supplies and postage are expected to increase by 11% during 2023. 6. On January 1st, the company will invest $124,500 in new equipment for its custom cabinet division. This equipment will have a 6 -year life and should be depreciated using the straight-line method. This purchase represents the only expected change to property, plant, and equipment. The company will finance the equipment purchase with a 6 year note at 4.50% interest. You will need to use an amortization schedule to find the principle and interest payment amounts. The loan is paid monthly. 7. In relation to #6 above, the custom cabinet sales division begins operations in 2023. The following assumptions must be used to project the impact on the financial statements. (Hint: You may need to add accounts to the trial balance.) a. Walnut Grove anticipates that it will sell 175 cabinets at an average selling price of \$3,700 each during 2023. b. Direct materials per cabinet are $525 per unit. c. The direct labor per cabinet is 4.0 hours, and Walnut Grove pays $29/ hour for this labor. d. Factory overhead is calculated at 50% of direct labor. 8. The building is being depreciated over a 39-year life. 9. Because of the new cabinet division, insurance costs will increase annually by $27,500, effective January 1 . The company prepaid 2 years of this insurance and received a 3% discount for the 2-year prepayment. 10. On March 1, a new cabinet division manager will be hired at a cost of $63,000. In addition to the new cabinet division manager, 2 new employees will be hired at an average wage of \$23.50 per hour, employees work an average of 40 hours per week. Payroll taxes should be calculated at 18% of wages. 11. With 20 weeks remaining in the year, 3 additional employees will be hired at a rate of $18.50 per hour, based on an average of 35 hours per week. 12. The income tax rate is 21%. 13. At the end of the year, Walnut Grove will have $38,000 in ending inventory. 14. Purchases are made evenly throughout the year and are paid in full in the month following purchase. 15. Sales are collected in full the month following the sale. During the month of December, invoiced sales totaled $148,500. 16. The sales tax rate is 6.50%. 17. At the end of the year, Walnut Grove has received full payment for 19 custom cabinet orders that will be completed in January 2023. WALNUT GROVE TRIAL BALANCE For the Years Ended December 31, 2022 and 2023 Walnut Grove Projected Income Statement For the Year Ended December 31, 2023 Walnut Grove Projected Balance Sheet As of December 31, 2023 Walnut Grove Projected Statement of Cash Flows For the Year Ended December 31, 2023 INSTRUCTIONS: Using the 2022 trial balance and additional information below, prepare the projected (2023) financial statements for Walnut Grove. The prior year data (provided) is the starting point for your projections, and then each of the assumptions listed below will also be used. Prepare an Excel workbook which contains the following information: - Tab 1: 2022 Trial Balance (provided in this document) - Tab 2: 2023 Projected Income Statement - Tab 3: 2023 Projected Balance Sheet - Tab 4: 2023 Projected Statement of Cash Flows Assumptions: 1. Sales will change as follows: a. Material \& Supplies Sales will increase 6% b. Small Tool Sales will increase 3% c. Tool Rental Revenue will continue throughout the 2023 year. An average of 18 tools will be rented each week, at an average of $75 per week. 2. Vendor compensation will increase consistently with Material \& Supplies Sales and Small Tools Sales. 3. Cost of sales for materials and supplies and small tools will increase proportionately based on their current percentage of sales, respectively. (HINT: You will need to use vertical analysis.) 4. Small tools, including blades and other items, will be expected, and are expected to total $7,900 in 2023. 5. Office supplies and postage are expected to increase by 11% during 2023. 6. On January 1st, the company will invest $124,500 in new equipment for its custom cabinet division. This equipment will have a 6 -year life and should be depreciated using the straight-line method. This purchase represents the only expected change to property, plant, and equipment. The company will finance the equipment purchase with a 6 year note at 4.50% interest. You will need to use an amortization schedule to find the principle and interest payment amounts. The loan is paid monthly. 7. In relation to #6 above, the custom cabinet sales division begins operations in 2023. The following assumptions must be used to project the impact on the financial statements. (Hint: You may need to add accounts to the trial balance.) a. Walnut Grove anticipates that it will sell 175 cabinets at an average selling price of \$3,700 each during 2023. b. Direct materials per cabinet are $525 per unit. c. The direct labor per cabinet is 4.0 hours, and Walnut Grove pays $29/ hour for this labor. d. Factory overhead is calculated at 50% of direct labor. 8. The building is being depreciated over a 39-year life. 9. Because of the new cabinet division, insurance costs will increase annually by $27,500, effective January 1 . The company prepaid 2 years of this insurance and received a 3% discount for the 2-year prepayment. 10. On March 1, a new cabinet division manager will be hired at a cost of $63,000. In addition to the new cabinet division manager, 2 new employees will be hired at an average wage of \$23.50 per hour, employees work an average of 40 hours per week. Payroll taxes should be calculated at 18% of wages. 11. With 20 weeks remaining in the year, 3 additional employees will be hired at a rate of $18.50 per hour, based on an average of 35 hours per week. 12. The income tax rate is 21%. 13. At the end of the year, Walnut Grove will have $38,000 in ending inventory. 14. Purchases are made evenly throughout the year and are paid in full in the month following purchase. 15. Sales are collected in full the month following the sale. During the month of December, invoiced sales totaled $148,500. 16. The sales tax rate is 6.50%. 17. At the end of the year, Walnut Grove has received full payment for 19 custom cabinet orders that will be completed in January 2023. WALNUT GROVE TRIAL BALANCE For the Years Ended December 31, 2022 and 2023 Walnut Grove Projected Income Statement For the Year Ended December 31, 2023 Walnut Grove Projected Balance Sheet As of December 31, 2023 Walnut Grove Projected Statement of Cash Flows For the Year Ended December 31, 2023