Use the information below to complete the attached spreadsheet (above, cannot include excel files)

A complete budget worksheet for Hannah & Maggie Inc. (sales budget, inventory budget, cash budget)

A budgeted Pro Forma Income Statement for the three-month period ending March 31, 2020. (Calculate Net Income)

A budgeted Balance Sheet for March 31, 2020.

Problem:Hannah & Maggie Inc.

Hannah & Maggie are independent recording artists who sell their music wholesale for a living. In December Hannah found a Neumann record cutting machine on sale for $25,000. The machine can be used to transfer digital music to vinyl records.

Hannah and Maggie think their new album would sound amazing (and sell well) as an LP, but they need a loan to purchase the machine. A local bank is agreeable, but requires both current (2019) and budgeted (3 months in 2020) financial statements.

Based on the following information from Hannah & Maggie, construct the banker's report using the excel spreadsheet provided (seriously, use the spreadsheet!).

Balance Sheet

December 31, 2019

Cash $50,000

Accounts Receivable 31,000

Inventory 12,000

Fixed Assets 37,000

Total Assets $130,000

Accounts Payable $22,500

Accrued Credit Fees 9,200

Common Stock 46,800

Retained Earnings 51,500

Total Liab & Equity $130,000

2020 Sales Forecast

January $74,000

February $82,000

March $58,000

April $54,000

May $80,000

June $67,000

July $70,500

Additional Information:

a. Everyone who buys H&M's music pays with a credit card. H&M collect 35% in the month of the sale and 65% in the month after the sale.

b. The credit card sales also mean that H&M incur a 6.2% sales fee. The sales fee is due one month after the sale.

c. The cost of sales is 42% of (current month) sales.

d. To make sure they don't run out of music to sell at shows, Hannah & Maggie plan to maintain inventory at the sales requirements for the next two months' budgeted sales.

e. Hannah & Maggie use a credit card for all their purchases; the duo pays off their balance in full the following month.

f. Hannah & Maggie pay their manager 5% of sales each month.

g. In addition to the variable management cost, the duo incurs fixed expenses of $22,000 per month, $1500 of which is for depreciation of fixed assets.

Hannah & Maggie Assumptions: Sales Collections Month O Month 1 Credit Card Fee 35% 65% 6.2% Cost of Sales VC: Mgmt Fee Fixed expense Deprecation 42% of sales 5.0% of sales 22,000 1,500 *** See the Balance Sheet as of December 31, 2019 below (hint: you will need some of these numbers to complete the budgets below) Schedule 1: Sales Budget Month Sales Cost of Monthly Sales Add: Desired End Inv. Sales: Desired E Plus: This month's sales (COS) Less: Beginning inventory Purchase Requirements 1 2 Schedule 2: Inventory Budget Jan Jan Beginning Balance Plus cash receipts from sales: Cash from Sales Total Cash Receipts Cash Expenditures Inventory Purchases Variable Costs (meme) Credit Card Fees Fixed Expenses Total Cash Expenditures Ending Cash Balance Sales Cost of goods sold Gross Margin Less Expenses: Variable Costs (mamt fee) Credit Card Fees Fixed Expenses Total Expenses Net Income Feb 3 March Schedule 4: Cash Budget Feb March April May Pro Forma Income Statement For the period January 1-March 31, 2020 January February March Balance Sheet December 31, 2019 and March 31, 2020 3/31/2020 12/31/2019 Assets Cash $ 50,000 Accounts Receivable 31,000 Inventory 12,000 Fixed Assets Total Assets 37,000 $ 130,000 Liabilities & Equity Accounts Payable $ 22,500 Accrued Credit Fees 9,200 Common Stock Retained Earnings 46,300 51,500 Total Liabilities & Equity $ 130,000 Total Retained Earnings Cak RE: 12/31/2019 NI: 3/31/2020 RE: 3/31/2020