The company is planning to open another location in 2018 . Prepare pro forma financials for 2018 for the new location using the following information:

1. Cost of leasing commercial space: $1,500 per month.

2. Cost of new equipment: $15,000, purchased with a long-term note. Use straight line depreciation assuming a seven-year life, no residual value. Use full years depreciation for the first year. Equipment purchase was financed with a long-term note.

3. Cost of hiring and training new employees: three at $25,000 each for the first year.

4. Except as noted below in 1, 2, 3, and 5, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing store (from preliminary statements) except no stock. Retained earnings = net income

5. Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.

Peyton Approved
Income Statement
For Year Ended 12/31/2017
Bakery Sales	$327,322.55
Merchandise Sales	1205.64
Total Revenues		328,528.19
Costs of goods sold - baked	105,834.29
costs of goods sold - Merchandise	859.77
Total Costs of Goods Sold		106,694.06
Gross Profit		221,834.13
Operating Expenses
Rent Expense	24,549.19
Wages Expense	10670.72
Misc. Supplies Expense	3000.46
Business Licensure Expense	2045.77
Misc. Expense	1363.84
Depreciation Expense	677.86
Insurance Expense	1091.08
Advertising Expense	1549.74
Interest Expense	818.31
Telephone Expense	490.98
Gain\Loss on disposal of equipment	100
Total Operating Expense		46,357.95
Net Income		175,476.18

Peyton Approved
Statement of cash Flow
For Year Ended 12/31/2017
Net Income				$ 175,476.18
Loss on disposal of fixed asset				100.00
Depreciation Expense				677.86
					176,254.04
Increase in accounts receivable					(25,886.91)
Increase in other receivables - insurance					(700.00)
Increase in baking supplies					(11,362.84)
increase in merchandise inventory					(243.10)
increase in consignment inventory					(200.00)
increase in prepaid rent					(449.55)
increase in prepaid insurance					(1,004.55)
increase in misc. supplies					(114.99)
increase in accounts payable					6,467.11
increase in wages payable					1,850.48
increase in interest payable					44.96
increase in customer deposit					1,000.00
Operating Cash Flow						145,654.65
Cash flow from investments
equipment Purchases					(6,000.00)
Insurance Proceeds					700.00
Cash Flow From Investments						(5,300.00)
Cash flow from financing
Repayment of Note Payable					(10,000.00)
Dividends Paid					(105,000.00)
Cash Flow From Financing						(115,000.00)
Net Cash Flow						24,354.65
Beginning Cash						43,165.39
Ending Cash						67,520.04

Peyton Approved
Balance Sheet
As of December 31, 2016
Assets					Liabilities and Owners' Equity
	Current Assets:					Current Liabilities:
	Cash	43,165.39				Accounts Payable	16,970.00
	Accounts Receivable	42,633.00				Wages Payable	1,532.80
	Baking Supplies	7,318.86				Interest Payable	166.50
	Merchandise Inventory	794.97
	Prepaid Rent	1,665.00
	Prepaid Insurance	1,110.00
	Misc. Supplies	55.50
	Total Current Assets		96,742.72			Total Current Liabilities		18,669.30
						Long Term Liabilities:
	Long Term/Fixed Assets:					Notes Payable	15,000.00
	Baking Equipment	8,000.00				Total Long Term Liabilities:		15,000.00
	Accumulated Depreciation	-928.58
	Net Fixed assets		7,071.42			Total Liabilities:		33,669.30
						Common Stock	20,000.00
						Retained Earnings	50,144.84
						Total Equity		70,144.84
	Total Assets:		103,814.14			Total Liabilities & Equity		103,814.14