Using information given on the Facts tab, finish the Proforma tab (Proforma), Income Statement tab (IS), Balance Sheet tab (BS) and Statement of Cash Flows tab (CF). ?? finish all tables below.

Martin Auto Repair & Maintenance
Case Facts and Assumptions
Module 10 Exercise
Martin Auto Repair wants to evaluate the possibility of adding additional bays to their existing facility to increase volume. The new bays would be identical to the existing bays, so many of the inputs would be identical in proportion to sales. In order to add additional bays, the facility would need to lease more space in its' building, and purchase new equipment. The facility would be constructed in 2024, and begin operations in 2025.
Using the 2023 operating results for Martin, create pro forma financial statements that can measure the feasibility and financial performance of this potential project. Please consider the following facts:
	$ 386,000	Revenue attributed to New Repair Bays in 2025
	4.00%	Repair Revenue Growth YoY
The following Items should grow in proportion to revenue:
	COGS
	Salaries
	Benefits & Pensions
	Advertising
	Sales, General & Administrative (SG&A)
	Repairs
	Insurance Expense
	Miscellaneous Expenses
Rent is usually determined as the price per square foot per year as follows:
	$ 12.00	per square foot/year
	3,400	square feet currently leased to Martin
	1,250	additional square feet needed for new service bays
	8.00%	Interest Charges on existing notes payable
New Equipment will be required if the new bays were added, as follows:
	$ 175,000	Martin equipment purchased in 2025
	$ 17,500	Annual depreciation expense attributable to the new equipment
	10.00%	of equipment cost paid in cash in 2025
	90.00%	of equipment cost financed in 2025
	7.75%	Interest Charges on the financed portion of the new equipment
	$ 40,000	Architectural Fees required, to be incurred in 2024
	$ 145,000	Construction/Installation Fees required, to be incurred in 2024
Architectural, Installation and Construction Fees should be categorized as Professional Fees on the IS
Additional facts to consider;
	12.85%	Payroll tax rate payable on Wages & Salaries (FICA, Medicare, FUTA, SUTA)
	40.00%	Dividend rate of Net Income paid out as dividends as required by the BoD
	$ 38,000	Annual depreciation expense attributable to existing equipment
	$ 50,000	Annual principle payments on notes payable only if net income is positive
		(will reduce principle amount for next year)
	14.00%	Income Tax Rate charged on EBT (if EBT is positive)

Martin Auto Repair & Maintenance
Pro Forma
SCHEDULE 1 - SALES FORECAST					2023	2024	2025	2026	2027
	Auto Repair Revenues		0.00%	Annual Growth	$ 1,626,540	$ -	$ -	$ -	$ -
	New Bay Repair Revenues		0.00%	Annual Growth	$ -	$ -	$ -	$ -	$ -
				TOTAL FORECASTED REVENUE	$ 1,626,540	$ -	$ -	$ -	$ -
SCHEDULE 2 - COST OF GOODS SOLD					2023	2024	2025	2026	2027
	Auto Parts		0.00%	of Revenue	$ 409,378	$ -	$ -	$ -	$ -
	Direct Labor		0.00%	of Revenue	$ 385,500	$ -	$ -	$ -	$ -
	Payroll Taxes on Direct Labor		0.00%	of Wages	$ 50,179	$ -	$ -	$ -	$ -
				TOTAL FORECASTED COST OF GOODS SOLD	$ 845,057	$ -	$ -	$ -	$ -
SCHEDULE 3 - WAGES & SALARIES					2023	2024	2025	2026	2027
	Executive Salaries		0.00%	of Revenue	$ 189,782	$ -	$ -	$ -	$ -
	Other Salaries & Wages		0.00%	of Revenue	$ 131,745	$ -	$ -	$ -	$ -
	Payroll Taxes		0.00%	of Wages	$ 28,466	$ -	$ -	$ -	$ -
	Benefits/Pensions		0.00%	of Revenue	$ 25,681	$ -	$ -	$ -	$ -
				TOTAL FORECASTED WAGES & SALARIES	$ 375,674	$ -	$ -	$ -	$ -
SCHEDULE 4 - FIXED OPERATING COSTS					2023	2024	2025	2026	2027
$ 12.00/sq ft	Rent - Existing Facility		3,400	square feet	$ 40,800	$ -	$ -	$ -	$ -
$ 12.00/sq ft	Rent - New Bays		1,250	square feet	$ -	$ -	$ -	$ -	$ -
	Sales General & Administrative		0.00%	of Revenue	$ 150,641	$ -	$ -	$ -	$ -
	Marketing/Advertising		0.00%	of Revenue	$ 16,513	$ -	$ -	$ -	$ -
	Repairs		0.00%	of Revenue	$ 11,994	$ -	$ -	$ -	$ -
	Insurance Expense		0.00%	of Revenue	$ 4,550	$ -	$ -	$ -	$ -
	Miscellaneous Expenses		0.00%	of Revenue	$ 5,364	$ -	$ -	$ -	$ -
				TOTAL FORECASTED FIXED OPERATING COSTS	$ 229,862	$ -	$ -	$ -	$ -
SCHEDULE 5 - NON-OPERATING COSTS					2023	2024	2025	2026	2027
	Professional Fees		0.00%	of Revenue	$ 6,775	$ -	$ -	$ -	$ -
	Legal Fees		0.00%	of Revenue	$ 4,000	$ -	$ -	$ -	$ -
	Architectural Fees				$ -	$ -	$ -	$ -	$ -
	Construction/Installation Fees				$ -	$ -	$ -	$ -	$ -
				TOTAL FORECASTED NON-OPERATING EXPENSES	$ 10,775	$ -	$ -	$ -	$ -
NET OPERATING INCOME					$ 165,172	$ -	$ -	$ -	$ -
NET OPERATING PROFIT MARGIN	10.15%

Martin Auto Repair & Maintenance
Multi-Step Income Statement
REVENUE					2023	2024	2025	2026	2027
	Net Sales				$ 1,626,540	$ -	$ -	$ -	$ -
	Cost of Goods Sold (COGS)				$ 845,057	$ -	$ -	$ -	$ -
	Gross Profit				$ 781,483	$ -	$ -	$ -	$ -
EXPENSES					2023	2024	2025	2026	2027
	Salaries and Wages Expense				$ 375,674	$ -	$ -	$ -	$ -
	Sales, General & Administrative				$ 150,641	$ -	$ -	$ -	$ -
	Rent Expense				$ 40,800	$ -	$ -	$ -	$ -
	Marketing/Advertising Expense				$ 16,513	$ -	$ -	$ -	$ -
	Repairs				$ 11,994	$ -	$ -	$ -	$ -
	Insurance Expense				$ 4,550	$ -	$ -	$ -	$ -
	Miscellaneous Expenses				$ 5,364	$ -	$ -	$ -	$ -
	Professional/Legal				$ 10,775	$ -	$ -	$ -	$ -
	Depreciation Expense				$ 38,000	$ -	$ -	$ -	$ -
	Total Expenses				$ 654,311	$ -	$ -	$ -	$ -
EBIT					$ 127,172	$ -	$ -	$ -	$ -
OTHER INCOME (EXPENSES)					2023	2024	2025	2026	2027
	Interest Income (on EBIT>0)		0.00%	of EBIT	$ 1,449	$ -	$ -	$ -	$ -
	Other Income		0.00%	of EBIT	$ 3,970	$ -	$ -	$ -	$ -
	Less Interest Expense		0.00%	on Notes	$ (20,345)	$ -	$ -	$ -	$ -
	Total Other Income (Expense)				$ (14,926)	$ -	$ -	$ -	$ -
EARNINGS BEFORE TAX					$ 112,246	$ -	$ -	$ -	$ -
	Less Income Taxes		0.00%	of EBT	$ (15,714)	$ -	$ -	$ -	$ -
NET INCOME					$ 96,532	$ -	$ -	$ -	$ -

Martin Auto Repair & Maintenance
Balance Sheet
ASSETS
Current Assets					2023	2024	2025	2026	2027
	Surplus Cash (Required Cash)				$ 57,800	$ -	$ -	$ -	$ -
	Accounts Receivable		0.00%	of Revenue	$ 58,007	$ -	$ -	$ -	$ -
	Inventory		0.00%	of Revenue	$ 60,412	$ -	$ -	$ -	$ -
	Other Current Assets		0.00%	of Revenue	$ 36,280	$ -	$ -	$ -	$ -
Total Current Assets					$ 212,499	$ -	$ -	$ -	$ -
Fixed Assets					2023	2024	2025	2026	2027
	Equipment				$ 626,183	$ -	$ -	$ -	$ -
	Less Accumulated Depreciation				$ (395,500)	$ -	$ -	$ -	$ -
Total Long-Term Assets					$ 230,683	$ -	$ -	$ -	$ -
TOTAL ASSETS					$ 443,182	$ -	$ -	$ -	$ -
LIABILITIES
Current Liabilities					2023	2024	2025	2026	2027
	Accounts Payable		0.00%	of Revenue	$ 55,746	$ -	$ -	$ -	$ -
	Accrued Liabilities		0.00%	of Revenue	$ 23,587	$ -	$ -	$ -	$ -
	Line of Credit Payable		0.00%	of Revenue	$ 34,374	$ -	$ -	$ -	$ -
Total Current Liabilities					$ 113,707	$ -	$ -	$ -	$ -
Long-Term Liabilities					2023	2024	2025	2026	2027
	Notes Payable				$ 254,428	$ -	$ -	$ -	$ -
Total Long-Term Liabilities					$ 254,428	$ -	$ -	$ -	$ -
TOTAL LIABILITIES					$ 368,135	$ -	$ -	$ -	$ -
EQUITY
Shareholder's Equity					2023	2024	2025	2026	2027
	Common Stock				$ 208,820	$ -	$ -	$ -	$ -
	Net Income				$ 96,532	$ -	$ -	$ -	$ -
	Less Dividends		40.00%	of Net Income	$ (38,613)	$ -	$ -	$ -	$ -
	Equity Plug				$ (191,692)	$ -	$ -	$ -	$ -
TOTAL OWNER'S EQUITY					$ 75,047	$ -	$ -	$ -	$ -
TOTAL LIABILITIES & EQUITY					$ 443,182	$ -	$ -	$ -	$ -
			Does this balance?		TRUE	TRUE	TRUE	TRUE	TRUE
			Assets		$ 443,182	$ -	$ -	$ -	$ -
			Liabilities		$ 368,135	$ -	$ -	$ -	$ -
			Equity		$ 75,047	$ -	$ -	$ -	$ -

+ 1 23 < Facts Proforma IS A B C D BS E CF F G H J Martin Auto Repair & Maintenance Statement of Cash Flows 4 Cash Flows from Operating Activities LO 5 Net Income 2023 2024 2025 2026 2027 $ 96,532 $ $ $ $ =IS!J33 6 Additions to Cash 7 + Depreciation Expense $ 38,000 $ $ $ $ =IS!J18 8 + Amortization Expense $ $ $ $ $ 0 9 + Increase in Accounts Payable $ 10,896 $ - $ $ $ =BS!J21-BS!I21 10 + Increase in Taxes Payable $ (36,333) $ $ $ $ 11 + Increase in Accrued Liabilities $ (17,877) $ - $ $ $ =IS!J31-IS!|31 =(BS!J22-BS!122) 12 Subtractions from Cash 13 Increase in Receivables $ 16,273 $ $ $ $ =-(BS!J7-BS!17) 14 Increase in Inventory $ (14,867) $ $ $ $ =-(BS!J8-BS!18) 15 Increase in Prepaid Expenses $ $ $ $ $ 0 16 17 Net cash Provided by Operations $ 92,624 $ $ $ =SUM(H5:H16) 18 19 Cash Flows from Investing Activities 2023 2024 2025 2026 2027 20 Increase in Equipment $ (72,500) $ $ $ $ |=-(BS!J13-BS!|13) 21 Increase in Property $ $ $ $ $ 0 22 + Proceeds from the sale of Equipment $ $ $ $ $ 0 23 + Proceeds from the sale of Property $ $ $ $ $ 0 24 + Sale of Long-Term Investments $ $ - $ $ $ 0 25 Net cash Provided by Investing $ (72,500) $ $ =SUM(H20:H24) 26 27 Cash Flows from Financing Activities 2023 2024 2025 2026 2027 28 + Proceeds from Bank Loans & Notes Payable $ $ - $ $ $ =BS!J27-BS!127 29 + Proceeds from Issuing Common Stock $ $ $ $ $ =BS!J34-BS!134 30 + Proceeds from Revolving Line of Credit $ 4,874 $ - $ $ $ =BS!J23-BS!123 31 + Proceeds from Issuing Bonds $ $ $ $ $ 0 32 Dividends Paid $ (38,613) $ $ $ $ 33 Repayment of Bank Loans & Notes Payable $ (50,000) $ $ $ $ 34 Net cash Provided by Financing $ (83,739) $ $ $ =BS!J36 |=IF((H5>0),((-Facts!$B$35)),0) =SUM(H28:H33) 35 36 NET CHANGE IN CASH DURING PERIOD $ (63,615) $ $ $ =H17+H25+H34 37 38 NET CASH AT BEGINNING OF PERIOD $ 121,415 $ $ |=G40 39 40 NET CASH AT END OF PERIOD $ 57,800 $ $ =H36+H38 41 42 43