The financial statements for The Seattle Company for 20x1 appear below. Balance Sheet Current Assets: Cash $ 3,100 Accounts Receivable 7,200 Supplies 500 Inventory 15,800 Prepaid Insurance 1,600 Total Current Assets $28,200 Long-Term Assets: Fixed Assets $80,000 Accumulated Depreciation (38,600) Patent, net of amortization 5,000 Total Long-Term Assets $46,400 Total Assets $74,600 Current Liabilities: Accounts Payable (for inventories) $ 5,900 Wages Payable 4,400 Interest Payable 1,000 Taxes Payable 3,900 Total Current Liabilities $15,200 Long-Term Liabilities: Bonds Payable 28,000 Total Liabilities $43,200 Stockholders Equity: Common Stock $16,000 Retained Earnings 15,400 Total Stockholders' Equity $31,400 Total Liabilities and Stockholders Equity $74,600 Income Statement Sales $114,600 Cost of Goods Sold (48,900) Gross Profit 65,700 Less Operating Expenses: Wage Expense $29,900 Supply Expense 3,500 Insurance Expense 2,400 Depreciation Expense 6,200 Amortization Expense 1,500 Rent Expense 4,200 (47,700) Operating Income 18,000 Interest Expense (3,000) Income Before Taxes 15,000 Income Tax Expense (6,000) Net Income $ 9,000

a. Using Excel, prepare a forecasted income statement, balance sheet and statement of cash flows for 20x2 under the quick & dirty method. Assume that sales are projected to grow by 15%. Also assume the firm wishes to achieve a debt-to-equity ratio of 1.40 and pay out no dividend.

b. Because inventory is a very significant asset you now decide that you should make an EOQ assumption for the ending inventory amount. Redo your spreadsheet under this assumption.

c. Redo part b. assuming that bonds payable are the only interest-paying debt (i.e., there is no interest on current liabilities).