Reids Rides sells high quality BMX bikes for $495 each. The cost to produce the bikes average $325.00 each. Depreciation expenses run $2,000 per year. Utilities average $1150 per month, Insurance is $2,650 per year, vehicle gas averages $95 per month, phone and internet is $275 per month and rent is $2,000 per month (5 year lease). Vehicle license and other fees are $795 per year. In addition Reid has a budget for tools at $85 per month. Last year Reid sold 547 bikes. Part time help is $7,800 per year. Reid has the following assets, miscellaneous parts $9,550, tools $4,800 delivery/service truck $22,000, office equipment, display racks, computers, phones equal $19,000 with an inventory of 80 bikes. The company has a five-year loan. The loan amount at the start of year was $50,000 with an Interest rate of 6.5%. Accumulated depreciation is in the amount of $15,000. Operating Cash is $10,000, Cash in savings of 35,000. His tax rate is 24%. Reid averages $4,500 in accounts receivable and $2,500 in accounts payable. Reid operates as a sole proprietorship. Complete the following:

Construct in good form an income statement. What is the profit for Reids Rides

Develop a balance sheet for Reids Rides

Calculate the breakeven amount in dollars for Reids Rides for the current year (do not include depreciation or taxes). How many bikes must be sold to meet the breakeven amount?

Using the income statement and balance sheet you developed for Reids Rides calculate the following ratios: Profit margin, Return on Assets, Average Collection Period, Total Asset Turnover, Current Ratio, Quick Ratio, and Times Interest Earned. In a report of approximately 500 words analyze the ratios and explain how you think Reids Rides is doing?

Develop a projected income statement that shows how many bikes Reid must sell to make a before tax profit of $30,000 and for $50,000? Is it feasible based on is current sales for him to make a profit of $30,000 or $50,000? Explain.

Reid believes sales will increase 10% for next year. In addition he expects cost of goods to increase by 3% and other expenses to increase 5%. (Loan payments and rent remain the same) The owner wants a profit of $30,000. Construct an income statement that reflects the increase in sales and expenses with a before tax profit of $30,000. Will a 10% increase meet his estimates? In a narrative report of approximately 500 to 750 words explain your recommendation. If he did not meet his goal what measures must he take to make his goal realistic? (how much of an increase is needed) If he made his goal how much extra did he make over his required $30,000 salary?