Need help on creating the proforma income and balance sheet. Thank you!

The company is planning to open another location in 2018. Prepare pro forma financials for 2018 for the new location using the following information:

Cost of leasing commercial space: $1,500 per month.

Cost of new equipment: $15,000, purchased with a long-term note. Use straight line depreciation assuming a seven-year life, no residual value. Use full years depreciation for the first year.

Cost of hiring and training new employees: three at $25,000 each for the first year.

Except as noted below, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing store (from preliminary statements) except no stock. Retained earnings = net income.

Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.

For notes to the financial statements and Management Analysis Memo, consider the following:

Peyton Approved uses the following accounting practices:

Inventory: Periodic, LIFO for both baking and merchandise

Baking supplies: $27,850 ending inventory

Equipment: Straight line method used for equipment

Business Financing Information: Use this information to calculate interest rates and insurance information, and to assess their impact on the companys financial obligations:

6% interest note payable was made on Jan 31, 2017, and is due Feb 1, 2019.

5-year loan was made on June 1, 2016. Terms are 7.5% annual rate, interest only until due date.

Insurance: Annual policy covers 12 months, purchased in February, covering March 2017 to February 2018. No monthly adjustments have been made.

	Peyton Approved
	Income Statement
	For Year Ended 12/31/2017
	Bakery Sales		$ 327,322.55
	Merchandise Sales		1,205.64
	Total Revenues			328,528.19
	Cost of Goods Sold - Baked		105,834.29
	Cost of Goods Sold - Merchandise		859.77
	Total Cost of Goods Sold			106,694.06
	Gross Profit			221,834.13
	Operating Expenses:
	Rent Expense		24,549.19
	Wages Expense		10,670.72
	Misc. Supplies Expense		3,000.46
	Business License Expense		2,045.77
	Misc. Expense		1,363.84
	Depreciation Expense		677.86
	Gain/Loss on disposal of equipment		100.00
	Insurance Expense		1,091.08
	Advertising Expense		1,549.74
	Interest Expense		818.31
	Telephone Expense		490.98
	Total Operating Expenses:			46,357.95
	Net Income			175,476.18

Peyton Approved
Balance Sheet
As of December 31, 2017
Assets					Liabilities and Owners' Equity
	Current Assets:					Current Liabilities:
	Cash	68,520.04				Accounts Payable	23,437.11
	Accounts Receivable	68,519.91				Wages Payable	3,383.28
	Other Receivable - Insurance	700.00				Customer Deposit	1,000.00
	Baking Supplies	18,681.70				Interest Payable	211.46
	Merchandise Inventory	1,038.07
	Consignment Inventory	200.00
	Prepaid Rent	2,114.55
	Prepaid Insurance	2,114.55
	Misc. Supplies	170.49
	Total Current Assets		162,059.31			Total Current Liabilities		28,031.85
						Long Term Liabilities:
	Long Term/Fixed Assets:					Notes Payable	5,000.00
	Baking Equipment	12,000.00				Total Long Term Liabilities:		5,000.00
	Accumulated Depreciation	-406.44
	Net Fixed assets		11,593.56			Total Liabilities:		33,031.85
						Common Stock	20,000.00
						Retained Earnings	120,621.02
						Total Equity		140,621.02
	Total Assets:		173,652.87			Total Liabilities & Equity		173,652.87
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Peyton Approved Second Location

Pro Forma Income Statement

For Year Ending 12/31/2018

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Peyton Approved Second Location
Pro Forma Balance Sheet
As of December 31, 2018