You have now completed each of your operating budgets. It looks pretty goodl "But what does this tell me?" you ask yourself. "This is good information, but I still do not know what my profits are projected to be or if I will need any additional cash borrowing during the period." Now you must put it all together to see if you will have profits and see if you have enough money to do what you want to do. You know that you have some of your own money to contribute to the business and you also know that you need to make some equipment purchases. Now it is time for you to develop your proforma (projected) income statement, balance sheet, and cash budget. Requirements for Part 3: Exhibit 3 contains information regarding your plans for capital contributions, equipment purchases, loans, minimum cash balances, and estimated tax rate. 1. Use the information from Exhibit 3 and information from your operating budgets completed in Part 2 to prepare the following for the first three months of the year. (a) Proforma variable income statement (b) Proforma absorption income statement (c) Cash budget (d) Proforma balance sheet 2. Short answer questions: (a) What is the main difference between the variable and absorption income statements? (b) What are the major benefits of budgeting? Is cash over $10,000 is available at the end of the month, you will make repayments f outstanding loans in multiples of $1000. f additional borrowing is necessary to maintain the $10,000 end-of-month balance, jou have a line of credit with the bank, and will borrow additional funds in multiples of $1,000. Interest ( 12% annual rate) is paid monthly on total outstanding borrowings at the end of the prior month. Income taxes are paid at the end of each quarter on net income for that quarter