need help

3 Projecting Financial Statements I have projected the company's balance sheet and income statement of 2007, assuming that the company will take full advantage of the trade discounts, where Jones pay his suppliers within 10 days of the invoice date and takes full advantage of the 2% discount offered. My assumptions when projecting the balance sheet are as follows: - Net sales for 2007 will be $2.7 million, as Mr. Jones predicted - In 2007, Jones Electrical Distribution will be as efficient as it was in 2006. Thus, - Accounts receivable remains at 43 days of net sales - Inventory remains at 76 days of COGS - Cash, PP\&E, and Accrued expense dollar balances are unchanged in 2007. In the case of PP\&E, this assumes that depreciation=capex in 2007. Assume depreciation expense remain the same at 35K. My assumptions when projecting the income statement are as follows: - Again, net sales for 2007 will be $2.7 million, as Mr. Jones predicted - In 2007, Jones Electrical Distribution will be as efficient as it was in 2006. Thus, - Operation expense as a percentage of net sales remains at 15.5% of net sales - COGS as a percentage of net sales remains at 81.1% - Interest expense remains at $31,000, for simplicity's sake. When preparing the statement of cash flows, no further assumptions are needed, as the statement of cash flows follow the balance sheet and the income statement. A couple of things to note as follows: - Depreciation expense is not explicitly listed under the income statement. Thus, I reverse engineer the depreciation expense based on the "accumulated depreciation" in the balance sheet - Under the financing activities, the company has three activities: - outflows : pay back the current portion of its long-term debt - outflows : pay back the line of credit payable - inflows : borrow money from the bank (new line of credit payable) You need to project Jones Electrical Distribution's financial statements in 2007, assuming that Jones decides to not take advantage of the trade discounts. You can follow all the assumptions made by me besides the following two items. - Accounts Payable balance is 30 days of COGS, instead of 10 days - COGS as a percentage of net sales is 83.1%, reflecting the 2% increase of costs to acquire goods due to not taking advantage of the trade discounts. Exhibit 1 Operating Statements for Years Ending December 31, 2004-2006, Exhibit 2 Balance Sheet as of December 31, 20042006 and for the first quarter 2007 (thousands of dollars) and March 31, 2007 (thousands of dollars) Eutikite: Evkihit? 2007 Projected Income Statement