please help I am extremely confused.This short term financial planning example has parts A-D

pected order, PDC's sales are forecasted to be $160,000 ToI Seprem 7. [Short-Term Financial Planning] Artero Corporation is a traditional toy products retailer that recently started an Internet-based subsidiary that sells toys online. A markup is added on purchases from manufacturers for resale. Swen Artero, the company president, is preparing for a meet- ing with Jennifer Brown, a loan officer with First Banco Corporation, to review year-end financing re- quirements. After discussions with the company's marketing manager, Rolf Eriksson, and finance manager, Lisa Erdinger, sales over the last three months of 2017 are forecasted to be: goods the company SALES FORECAST (IN $ THOUSANDS) MONTH October 2017 $1,000 November 1,500 3,000 December Artero's balance sheet as of the end of September 2017 was as follows: ARTERO CORPORATION BALANCE SHEET AS OF SEPTEMBER 30, 2017 (IN $ THOUSANDS) Cash 50 Accounts payable Notes payable Long-term debt Total liabilities Accounts receivable Inventories Net fixed assets 800 700 400 500 1,200 800 $2,000 750 Equity Total liabilities and equity Total assets $2,000 All sales are made on credit terms of net 30 days and are collected the following month. No bad anticipated. The accounts receivable on the balance sheet at the end of September thus will Inventory on hand represents a minimum operating level (or safety stock), which the company intends to main- tain. Cost of goods sold averages 80 percent of sales. Inventory is purchased in the month of sale and paid for in cash. Other cash expenses average 7 percent of sales. Depreciation is $10,000 per paid monthly and the effective income tax rate is 40 percent for planning debts are be collected in October, the October sales will be collected in November, and so on. month. Assume taxes are purposes. The annual interest rate on outstanding long-term debt and bank loans (notes payable) is 12 percent. capital expenditures planned during the period, and no dividends will be paid. The com- There are no pany's desired end-of-month cash balance is $80,000. The president hopes to meet any cash shortages during the period by increasing the firm's notes payable to the bank. The interest rate on new loans will be 12 percent. A. Prepare monthly pro forma income statements for October, November, and December and for the quarter ending December 31, 2017. B. Prepare monthly pro forma balance sheets at the end of October, November, and December 2017. C. Prepare both a monthly cash budget and pro forma statements of cash flows for October, Novem- ber, and December 2017. D. Describe your findings and indicate the maximum amount of bank borrowing that is needed c C pected order, PDC's sales are forecasted to be $160,000 ToI Seprem 7. [Short-Term Financial Planning] Artero Corporation is a traditional toy products retailer that recently started an Internet-based subsidiary that sells toys online. A markup is added on purchases from manufacturers for resale. Swen Artero, the company president, is preparing for a meet- ing with Jennifer Brown, a loan officer with First Banco Corporation, to review year-end financing re- quirements. After discussions with the company's marketing manager, Rolf Eriksson, and finance manager, Lisa Erdinger, sales over the last three months of 2017 are forecasted to be: goods the company SALES FORECAST (IN $ THOUSANDS) MONTH October 2017 $1,000 November 1,500 3,000 December Artero's balance sheet as of the end of September 2017 was as follows: ARTERO CORPORATION BALANCE SHEET AS OF SEPTEMBER 30, 2017 (IN $ THOUSANDS) Cash 50 Accounts payable Notes payable Long-term debt Total liabilities Accounts receivable Inventories Net fixed assets 800 700 400 500 1,200 800 $2,000 750 Equity Total liabilities and equity Total assets $2,000 All sales are made on credit terms of net 30 days and are collected the following month. No bad anticipated. The accounts receivable on the balance sheet at the end of September thus will Inventory on hand represents a minimum operating level (or safety stock), which the company intends to main- tain. Cost of goods sold averages 80 percent of sales. Inventory is purchased in the month of sale and paid for in cash. Other cash expenses average 7 percent of sales. Depreciation is $10,000 per paid monthly and the effective income tax rate is 40 percent for planning debts are be collected in October, the October sales will be collected in November, and so on. month. Assume taxes are purposes. The annual interest rate on outstanding long-term debt and bank loans (notes payable) is 12 percent. capital expenditures planned during the period, and no dividends will be paid. The com- There are no pany's desired end-of-month cash balance is $80,000. The president hopes to meet any cash shortages during the period by increasing the firm's notes payable to the bank. The interest rate on new loans will be 12 percent. A. Prepare monthly pro forma income statements for October, November, and December and for the quarter ending December 31, 2017. B. Prepare monthly pro forma balance sheets at the end of October, November, and December 2017. C. Prepare both a monthly cash budget and pro forma statements of cash flows for October, Novem- ber, and December 2017. D. Describe your findings and indicate the maximum amount of bank borrowing that is needed c C