Using the 2019 trial balance and additional information below, prepare the projected (2020) financial statements for Walnut Grove.The prior year data (provided) is the starting point for your projections, and then each of the assumptions listed below will also be used.

Prepare an Excel workbook which contains the following information:

Tab 1: 2019 Trial Balance (provided in this document) Tab 2: 2020 Projected Income Statement Tab 3: 2020 Projected Balance Sheet Tab 4: 2020 Projected Statement of Cash Flows Assumptions:

1. Sales will change as follows: a. Material & Supplies Sales will increase 8.5% b. Small Tool Sales will increase 10% c. Tool Rental Revenue will continue throughout the 2020 year.An average of 20 tools will be rented each week.The weekly rental per tool is $60.Assume that the average number of tools given will be rented for all 52 weeks. 2.Vendor Compensation will increase consistently with the sum increase of Material & Supplies Sales and Small Tools Sales. 3. Cost of sales for materials and supplies and small tools will increase proportionately based on their current percentage of sales, respectively.(HINT: You will need to use vertical analysis.) 4. Small tools, including blades and other items, is expected to total $8,000 in 2020. 5. Office supplies and postage are expected to increase by 35% during 2020. 6. On January 1st, the company will invest $135,000 in new equipment for its custom cabinet division.a. This equipment will have a 5-year life and should be depreciated using the straight-line method.This purchase represents the only expected change to property, plant, and equipment.

b. The company will finance the equipment purchased with a 5 year note at 3.65% interest.You will need to use an amortization schedule to find the principle and interest payment amounts.The loan is paid monthly. 7. In relation to #6 above, the custom cabinet sales division begins operations in 2020.The following assumptions must be used to project the impact on the financial statements. (Hint: You may need to add accounts to the trial balance.) a. Walnut Grove anticipates that it will sell 110 cabinets at an average selling price of $2,700. b. Direct materials per cabinet are $850 per unit. c. The direct labor per cabinet is 5 hours, and Walnut Grove pays $30.00/hour for this labor. d. Factory overhead is calculated at 65% of direct labor. 8. The building is being depreciated over a 39-year life. 9. Because of the new cabinet division, yearly insurance costs will increase by $29,500, effective January 1. The company prepaid 2 years of this insurance and received a 5% discount for the 2-year prepayment. 10. On January 1, a new cabinet division manager will be hired at a cost of $55,500.In additional to the new cabinet division manager, 3 new employees will be hired at an average wage of $18.50 per hour, employees work an average of 40 hours per week.Payroll taxes should be calculated at 20% of wages. 11. With 22 weeks remaining in the year, 3 additional employees will be hired at a rate of $16.50 per hour, based on an average of 36 hours per week. 12. The income tax rate is 21%. 13. At the end of the year, Walnut Grove will have $68,000 in ending inventory. 14. In relation #13, purchases are made evenly throughout the year and are paid in full in the month following purchase. 15. Sales are collected in full the month following the sale.During the month of December, invoiced sales totaled $142,500. 16. The sales tax rate is 6.3%. 17. At the end of the year, Walnut Grove has received full payment for 25 custom cabinet orders that will be completed in January 2021.

WALNUT GROVE

TRIAL BALANCE

For the Years Ended December 31, 2019 and December 31, 2020

2019

2020

Debit

Credit

Debit

Credit

Cash

185,500

Accounts Receivable

125,600

Inventory

55,000

Prepaid Expenses

-

Building

275,000

Computers & Software

10,000

Furniture & Fixtures

25,000

Land

75,000

Machinery & Equipment

-

Accumulated Depreciation

15,385

Accounts Payable

48,500

Payroll Tax Payable

1,050

Sales Tax Payable

7,913

Unearned Revenue

-

Line of Credit

300,000

Notes Payable

-

Peters, J., Capital

2,500

Peters, M., Capital

2,500

Retained Earnings

258,429

Custom Cabinet Sales

-

Material & Supplies Sales

282,714

Small Tool Sales

34,932

Tool Rental Revenue

12,648

Vendor Compensation Revenue

629

COGS: Custom Cabinets

-

COGS: Material & Supplies

90,468

COGS: Small Tools

21,309

COGS: Wages

33,060

Depreciation Expense

8,775

Insurance Expense

6,300

Office Supplies Expense

1,435

Payroll Tax Expense

5,950

Postage Expense

340

Small Tool Expense

6,041

Interest Expense

11,900

Income Tax Expense

30,522

967,200

967,200