Mary Alice Kirkpatrick irvented a process that converts liquid waste into a sweet-gmelling candle that burns off the waste in an erwircomentally friendly way. MAKK, as her friends call her, has turned that imention into a large-scale company and is now preparing the budget for the quarter ended March 31. She has gathered the following information. 1. Brad Harmon, MAK's sales manager, reported that the company sold 60,000 candes in December. He has developed the following sales forecast. The expected sales price is $35 per candle. 2. All sales are made an account. Histarically, the company has callected 75% of its sales in the month of sale and 20% in the month follawing the sale. The remaining 5% of sales are uncollectible. 3. Sales persannel receive a 3% commission on every candle sold in addition to their manthly salaries. The following manthly fooed selling and administrative expenses are planned for the quarter. Hawever, these amounts da not include the depreciation increase resulting from the budgeted equipment purchase in March (see part B]. 4. The company requires ending finished goads inventary to equal 15% of the following month's budgeted sales, in units. On December 31, 8,200 candles were an hand. 5. Ten cunces of raw materials are required to create each finished candle. The campary wants to have raw materials an hand at the end of each manth equal to 20% of the following manth's production needs. On December 31,109,000 aunces of materials were on hand. 6. The rawmaterials used in production cost $2.00 per ounce. Eighty percent af the month's purchases are paid for in the month of purchase; the rest is paid in the following month. No discount is available. 7. The standard labor allowed for one candle is 18 minutes. The current direct labor rate is $16 per hour. B. On March 1, the company plans to spend $72,000 to replace its office equipment that is fully depreciated. The new equipment is expected to have a ten-year life, with no residual value. 9. The budgeted monthly variable and fixed overhead are as follows. Variable averhead is based on the number of units produced. The fixed overhead budget is based on an annual production of 600,000 candles. 10. MAK must maintain a minimum cash balance of $100,000. An open line of credit at a local bank allows the campary to borrow up to $200,000 per quarter in $1,000 increments. 11. All borrowing is dane at the beginning of the month, and all repayments are made at the end of a month in $1,000 increments. Accrued interest is paid coly when the principal is repaid. The interest rate is 6% per year. 12. A quarterly dividend of $40,000 will be declared and paid in January. 13. Income taxes payable for the first quarter will be paid an January 15. MAK's tax rate is 35%. Prepare a pro-forma balance sheet as of March 31. (List Assets in order of liauiditv.) Mary Alice Kirkpatrick irvented a process that converts liquid waste into a sweet-gmelling candle that burns off the waste in an erwircomentally friendly way. MAKK, as her friends call her, has turned that imention into a large-scale company and is now preparing the budget for the quarter ended March 31. She has gathered the following information. 1. Brad Harmon, MAK's sales manager, reported that the company sold 60,000 candes in December. He has developed the following sales forecast. The expected sales price is $35 per candle. 2. All sales are made an account. Histarically, the company has callected 75% of its sales in the month of sale and 20% in the month follawing the sale. The remaining 5% of sales are uncollectible. 3. Sales persannel receive a 3% commission on every candle sold in addition to their manthly salaries. The following manthly fooed selling and administrative expenses are planned for the quarter. Hawever, these amounts da not include the depreciation increase resulting from the budgeted equipment purchase in March (see part B]. 4. The company requires ending finished goads inventary to equal 15% of the following month's budgeted sales, in units. On December 31, 8,200 candles were an hand. 5. Ten cunces of raw materials are required to create each finished candle. The campary wants to have raw materials an hand at the end of each manth equal to 20% of the following manth's production needs. On December 31,109,000 aunces of materials were on hand. 6. The rawmaterials used in production cost $2.00 per ounce. Eighty percent af the month's purchases are paid for in the month of purchase; the rest is paid in the following month. No discount is available. 7. The standard labor allowed for one candle is 18 minutes. The current direct labor rate is $16 per hour. B. On March 1, the company plans to spend $72,000 to replace its office equipment that is fully depreciated. The new equipment is expected to have a ten-year life, with no residual value. 9. The budgeted monthly variable and fixed overhead are as follows. Variable averhead is based on the number of units produced. The fixed overhead budget is based on an annual production of 600,000 candles. 10. MAK must maintain a minimum cash balance of $100,000. An open line of credit at a local bank allows the campary to borrow up to $200,000 per quarter in $1,000 increments. 11. All borrowing is dane at the beginning of the month, and all repayments are made at the end of a month in $1,000 increments. Accrued interest is paid coly when the principal is repaid. The interest rate is 6% per year. 12. A quarterly dividend of $40,000 will be declared and paid in January. 13. Income taxes payable for the first quarter will be paid an January 15. MAK's tax rate is 35%. Prepare a pro-forma balance sheet as of March 31. (List Assets in order of liauiditv.)