Projecting the Income Statement and Balance Sheet

Below are the financial statements of Bench Inc., a restaurant chain, for the year ended December 31, 2022. Prepare a forecasted Income Statement and Balance Sheet for the company for 2023. (Fill in the shaded boxes on the provided statement.)

To forecast the financial statements, make the following assumptions:

Revenue at company-operated stores is expected to grow by 5%

Revenue from franchised restaurants is expected to grow by 12%

Company-operated restaurant expenses are expected to be the same % of company-operated revenues that they were last year.

Selling, General, and Administrative expenses are expected to be the same % of total revenue that they were last year.

Depreciation Expense is expected to be 10% of the beginning balance of Net Property, Plant, and Equipment (PP&E).

Interest Expense is expected to be 8% of the beginning balance of the companys line of credit.

Income Tax Expense is expected to be the same % of Income Before Taxes that it was last year.

Accounts Receivable are expected to be 25% of 2023 franchise revenues.

Inventory is expected to be 10% of 2023 Company-operated restaurant expenses.

The company expects to acquire new property, plant, and equipment costing $10,000 on December 30, 2023.

Accounts Payable is expected to be 15% of the combined total of Company-operated restaurant expenses plus Selling, General, & Administrative expenses.

The company does not expect to issue any stock or repurchase any stock.

The company expects to pay dividends of $50,000 in 2023.

The company will use any available cash to pay off its Line of credit. If that Line of credit is fully paid off, any remaining cash will simply be held as cash.

Income Statement for the Year Ended 12/31/2022
Sales by Company-operated restaurants	240,000
Revenues from franchised restaurants	100,000
Total revenue		340,000
Company-operated restaurant expenses	168,000
Selling, General, and Administrative expenses	13,600
Depreciation Expense	14,000
Interest Expense	3,000	198,600
Income Before Taxes		141,400
Income Tax Expense		56,560
Net Income		84,840
Balance Sheet as of 12/31/2022
Assets
Cash	-
Accounts Receivable	25,000
Inventory	16,800
PP&E, net	210,000
Total Assets	251,800
Liabilities
Line of credit	24,560
Accounts Payable	27,240
Total Liabilities	51,800
Equity
Contributed Capital	80,000
Retained Earnings	120,000
Total liabilities and equity	251,800

Prepare the income statement for the year ended 2023 and balance sheet as of 12/31/2023