The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a $600,000 piece of property for club expansion. S The club manager is concerned about the club's capability to purchase equipment and expand its facilities. One club member has agreed to help prepare the following financial statements and help the manager ascertain whether the plans are realistic. Additional information follows the financial statements. CORTEZ BEACH YACHT CLUB Statement of Income (Cash Basis) For the Year Ended October 31 Cash revenues Annual membership fees Lesson and class fees Miscellaneous Total cash received Cash costs Manager's salary and benefits Regular employees' wages and benefits Year 9 Year 8 $ 710,000 $600,000 468,000 360,000 3,000 4,000 $1,182,000 $963,000 $ 72,000 $ 72,000 380,000 380,000 Additional Information Supplies Lesson and class employees' wages and benefits 390,000 300,000 32,000 31,000 44,000 30,000 46,800 50,400 4,000 3,000 Utilities (heat and light) Mortgage interest Miscellaneous Utilities (heat and light) Mortgage interest Miscellaneous Total cash costs Cash income 1. Other financial information as of October 31, year 9: a. Cash in checking account, $14,000. b. Petty cash, $600. c. Outstanding mortgage balance, $720,000. 44,000 30,000 46,800 50,400 4,000 3,000 $ 968,800 $866,400 $ 213,200 $ 96,600 d. Accounts payable for supplies and utilities unpaid as of October 31, year 9, and due in November, year 9, $5,000. 2. The club purchased $50,000 worth of sailing equipment during the current fiscal year (ending October 31, year 9). Cash of $20,000 was paid on delivery, with the balance due on October 1, which had not been paid as of October 31,