Prepare oash payment, inventory and cash receipt information first. Then prepare the proforma income statement

and the proforma balance sheet.

in thousands Toys for You

Proforma Income Statement

September December

Sales $$

Cost of goods sold

Gross profit

Selling & admin.

Amortization

Operating Profit

Interest

Profit before taxes

Taxes $(42\%$

Net income

Dividends

To retained earnings Liabilities and Shareholders' EquityToys for You, a manufacturing company, has been growing quickly but has found that its financial situation is continually under pressure. Production has fluctuated to meet demand in an attempt to provide first$-$class service, resulting in larger inventory positions. Also, the collection of accounts has worsened to approximately $60$ days, which is well above the terms of $30$ days. To address the finanical concerns, Toys for You has proposed level production and an effort by the credit department to bring the average collection period down to $35$ days.

Estimated sales for the upcoming months are:

July $$1,957,500$ October $2,362,500$

August $2,070,000$ November $2,475,000$

September $2,205,000$ December $2,565,000$

Sales for May were $$1,732,500$ and will be approximately $$1,845,000$ for the current month of June. It is projected that the current collection period of $60$ days will be reduces to $50$ days for July and August, $42$ days for September and October, and will meet the target of $35$ days in November and December.

Purchases of materials are forecast to be $$585,000$ a month beginning in July. In May they were $$675,000$ and in June they are expected to be $$607,500.$ The purchases are paid in $40$ days. Materials used per month beginning in July will be $$744,000.$ Labour expense will be paid when incurred and are expected to be $$195,000$ a month. Other expenses of manufacturing will also be paid as incurred and are expected to be $$375,000$ a month. Cost of goods sold has regularly been $70$ percent of sales.

Amortization is $$38,000$ per month. Selling and administrative expenses are expected to be $13$ percent of sales. The tax rate is $42$ percent.

There will be payments on notes of $$675,000$ in each of August and November. Interest of $$270,000$ and income taxes of $$338,000$ are both due in October. Dividends of $$22,500$ are payable in July and October.

TOYS FOR YOU

Balance Sheet $($estimated$)$

June $30,2023$

$($$ thousands$)$ Assets

Current assets:

Cash $$666$

Accounts receivable $3,578$

Inventory

Total current assets

Capital assets:

Plant and equipment $11,273$

Less: Accumulated amortization $4,7846,489$

Total assets

Liabilities and Shareholders' Equity Current liabilities: $$18,964$

Accounts payable $$945$

Notes payable $3,700$

Accrued liabilities

Total current liabilities

Long$-$term debt $4,725$

Common stock $4,500$

Retained earnings $2,498$

Total liabilities and shareholders' equity $$18,964$

Requirec

Using the information above:

$1.$Prepare a proforma income statement for the three month period ending September $2023$ and the three months ending December $2023.$

$2.$ Prepare a monthly cash budget for the six$-$month period $($July$-$December$)$

$3.$ Identify any need for short$-$term financing.

$4.$ Comment on the policy changes and examine the consequences if the collection period remains at $60$ days. Assume capital assets are sufficient for increased sales.

There are no changes in accounts not mentioned above. Please include formulas because this is in excel. Please also follow the layouts provided in the attached photos.