NAME: TAKE HOME PROBLEM WINTER 2021 DUE MONDAY, FEB 229 Garden Sales, in December 2013 21,15 Cach Accounts Receivable eventory Prepaid Rent 5 $ $ $ 60,000 11,300 73,050 12,000 Account Payable wat in 5 Accrued interest Poble Note Payable 5 Common Stock metained Earines 5 30.000 200,000 Pro. Plant Acum Der 900.000 (100 000 300,000 75,235 NetPPLES Total Asia 1,055,550 . . You are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings budget/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with the various departments, you have come up with the following information/assumptions: November 2017 and December 2017 sales were $100,000, each month Sales for the following three months will increase by $1.500 each month, beginning January through April Cost of Sales represents On of sales, each month Cash Operating Expenses are 15% of sales, exclusive of Depreciation expense Depreciation Expense is SR.000 per month and prepaid rent is amortired at $1.000 per month of the month sales, 25& collected as cash with the remaining placed on customer's account. Customer's accounts are usually paid off over a 2 month period (50% each month) beginning the month following the sale The CFO just informed you that one customer has filed bankruptcy therefore, $7,500 from Nov NR Sales will be written off in Jan to Bad Debt Exp. To maintain sufficient inventory, the company purchases 100% of the next month's cost of sales. They pay for 70%, in cash, in the month they purchase and pay the remaining 30% in the following month In March, the company is planning on replacing an outdated machine. The new machine will cost $15,000. The old machine originally cost $20,000 with a Net Book Value of 15,000 and will be sold for $6,000 The Company does not pay or accrue for taxes until the end of December The Company plans to pay a cash dividend of $8,000 at the end of March Assume all operating expenses incurred during the month are paid, in cash, during the same month incurred The Note Payable requires a principal payment of $10,000, plus interest of $250, at the end of March. For this note, no interest is Accrual/Expense until interest is paid The minimum cash month end balance required according to the bank agreement is $75,000 for any given month beginning Jan 30, 2018 A working capital line of credit is available, up to $100,000, and if needed, money is taken out at the beginning of the month. Interest is 1% per month Interest is paid on the working capital line when principal payments are paid on the debts at the end of any given month. Interest is accrued on the working capital line effective the beginning of the month when money is received 1. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2018 2. Prepare an Income Statement for the 3-month period ending March 2018 (good form) 3. Prepare a Balance Sheet as of March 31, 2018 (good for) 4. Assignment must be turned in as HAND WRITTEN document, Check Figures for 03/31 Retained Earnings: $778,549:42 Total Assets: $1.051,200.00