Take Home Problem #3 - Cash... 12:51 NAME: Cash Accounts Receivable Inventory Prepaid Rent Prop, Plant & Equip Accum Depr Total Assets $ $ Net PP&E $ Garden Sales, Inc. December 31, 2022 S 43,000.00 S 110,250.00 $ 62,400.00 12,000.00 $ 900,000.00 (100,000.00) 800,000.00 $ 1,027,650.00 You are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings budget/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with the various departments, you have come up with the following information/assumptions: Account Payable $ Working Capital Line $ Accrued Interest Payable S Note Payable $ This sheet must be turned in with your assignment. No exceptions. TAKE HOME PROBLEM - FALL 2023 (email) DUE THURS, NOV 9 Common Stock Retained Earnings $ S 24,960.00 50,000.00 200,000.00 752,690.00 Customer's accounts are usually paid off over a 2 month period (50% each month) beginning the month following the sale The CFO just informed you that one customer has filed bankruptcy therefore, $5,500 from Nov A/R Sales will be written off in Jan to Bad Debt Exp. To maintain sufficient inventory, the company purchases 100% of the next month's cost of sales. They pay for 60%, in cash, in the month they purchase and pay the remaining 40% in the following month. In March, the company is planning on replacing an outdated machine. The new machine will cost $30,000. The old machine originally cost $12,000, with a Net Book Value of $5,000 and will be sold for $3,000. The Company does not pay or accrue for taxes until the end of December. The Company plans to pay a cash dividend of $10,000 at the end of March. $ 1,027,650.00 Done November 2022 and December 2022 sales were $105,000, each month Sales for the following three months will decrease by $1,000 each month, beginning January through April. Cost of Goods Sold represents 60% of sales, each month. Cash Operating Expenses are 20% of sales, exclusive of Depreciation expense Depreciation Expense is $3,000, per month and prepaid rent is amortized at $1,200 per month Of the month's sales, 30% is collected as cash with the remaining placed on customer's account. 32 Assume all operating expenses incurred during the month are paid, in cash, during the same month incurred The Note Payable requires a principal payment of $8,300, plus interest of $800, at the end of March. For this note, no interest is Accrued/Expensed until interest is paid The minimum cash month end balance required according to the bank agreement is $60,000 for any given month beginning Jan 31, 2023. A working capital line of credit is available, up to $50,000, and if needed, money is taken out at the beginning of the month. Interest is 1% per month. Interest is paid on the working capital line when principal payments are paid on the debt; at the end of any given month. Interest is accrued on the working capital line effective the beginning of the month when money is received. 1. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2023 2. Prepare an Income Statement for each period Jan-Mar 2023 (in good form) 3. Prepare a Balance Sheet as of March 31, 2023 (in good form) 4. Although you may use Excel, this assignment must be turned in as a HAND-WRITTEN document. Check Figures for 03/31 Total Interest Exp: (3mo) $842.13 Total Equity: $983,547.87

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