We need to do an Income statement and balance sheet due at 8am tomorrow. Preferably done by 2am tonight.

AC 301, Fall 2016 Extra credit Project 1 (15 points) Due by Thursday October 27, 2016 Majestic Caterers was founded in September 2015 by Barbara Roberts and Lisa Grotto as a catering service in central Arizona. Majestic broke even for the year ended December 31, 2015; however, in 2016, the company experienced a high growth rate. Roberts and Grotto would like to expand their catering enterprise to include a restaurant. Roberts applied for an expansion loan at the local bank, and the bank has requested audited financial statements prepared on the accrual basis. Prior to this loan application, Majestic's financial records have been kept on a cash basis in order to accurately reflect Majestic's priority of cash flow. Roberts and Grotto hired the services of an independent accountant, Paul Maynard, to assist them in converting Majestic's 2016 financial statements, prepared on the cash basis, to 2014 accrual basis. From a review of the company's records and files, as well as discussions with Roberts and Grotto, Maynard has gathered the following data concerning Majestic's transactions during 2016 and the cash basis financial statements. In addition, the company's Statement of Financial Position at December 31, 2015, has been restated to an accrual basis as presented in the next page. Summary of Cash Transactions for 2016 Receipts Cash sales Collections from credit sales Proceeds from one-year, 12% note, Received January 1, 2016 Disbursements: Payments for supplies Wages paid to employees Payments to the utility company Insurance premiums paid Rent paid to landlord Interest on 12% note, paid on July 1, 2016 Equipment purchased on January 1, 2016 $464,000 160,000 80,000 161,600 248,000 44,000 36,000 72,000 4,800 100,000 Uncollected customers' bills totaled $139,600 at December 31, 2016 On January 1, 2014, a supplier of Majestic advanced the company $80,000 on a one-year, 12 percent note payable with semi-annual interest payments to be made on July 1, 2016 and at maturity on January 1, 2017. Unpaid bills to suppliers totaled $22,400 at December 31, 2016. Supplies costing $16,000 were on hand at December 31, 2016. Wages owed to employees at December 31, 2016 were $11,200. The December utility bill of $3,900 was unpaid at December 31, 2016. The insurance premium was paid for a one-year liability and property damage policy effective February 1, 2016. The rent of $6,000 per month was paid to the landlord on the first of every month. Maynard recommends depreciating the company's equipment, which was purchased January 1, 2016, for $100,000, over its useful life of ten years using the straight-line method of depreciation. The equipment has no estimated residual value. (In its first year of operation, 2015, Majestic leased equipment.) Majestic has an effective income tax rate of 40 percent. There were no differences between financial reporting and income tax reporting for the year ended December 31, 2016. No taxes were paid in 2016. Majestic Caterers Balance Sheet As of December 31, 2015 Assets Cash Accounts receivable Supplies Inventory Total Assets $51,200 48,800 48,000 $148,000 Liabilities and shareholders' equity Accounts payable -- Supplies Common stock Total liabilities and shareholders' equity $56,000 92,000 $148,000 Required: Using the accrual basis of accounting, prepare Majestic Caterers' Income Statement and Balance Sheet for the year ended December 31, 2016