Your goal is to complete the following for your first year of operations:

$$ A $12-$month cash budget

$$ A forecasted income statement for your first year

$$ A forecasted balance sheet as of the end of your first year

For this last activity, you will not be using the information you$$ve collected in your first two activities. Rather, you will use the information given below to complete this last assignment.

As you prepare your cash budget, forecasted income statement, and forecasted balance sheet, make the following assumptions regarding your first year of business:

$$ You will begin your cookie company on January $1$

$$ You will begin your cookie company with a $$2,000$ loan. Assume this is your starting cash balance.

o Assume an interest rate of $1\%$ per month on this loan.

o Assume you need to pay cash interest each month on the loan balance outstanding as of the beginning of the month

o Assume once your company has a $$Preliminary Cash Balance$$ of $$4,000$ or more for a particular month, it will pay off the $$2,000$ loan balance in full that month

$$ You will have initial start$-$up costs that you will pay for at the beginning of January. These are $1-$time costs that include the following:

o Commercial Oven $=$ $$1,000$

o Laptop $=$ $$300$

o Implements $($pans$,$ bowls, mixers, etc.$)=$ $$200$

$$ Assume the cookies you are making are very large chocolate chip cookies. Therefore, you only sell these cookies individually.

$$ The total cost of making one very large cookie $=$ $$10$

o Direct Materials$/$cookie $=$ $$4$

o Direct Labor$/$cookie $=$ $$4$

o Overhead$/$cookie $=$ $$2$

$$ Your selling price $=$ $$20$

$$ Assume you forecast to sell $100$ cookies in January and you forecast to sell $25$ more cookies than the previous month throughout your first year. $($Example: $125$ cookies in February, $150$ cookies in March, $175$ cookies in April, etc.$)$

o Assume your maximum capacity for making cookies each month is $300.$ Therefore, that is the most you can make and sell in a month. Keep this in mind for your sales forecasts in the later months of the year.

$$ Assume you sell all of the cookies you make in a month

$$ Assume $80\%$ of your sales are for cash and $20\%$ are on credit

o Your credit customers always pay you in full in the following month

$$ Assume you pay for all of your direct materials on credit, and you pay for direct materials purchases in the following month

o Example: In January you estimate making $300$ cookies at a $$4$ direct labor cost per cookie. Therefore the cash you pay for direct materials in January is $$0,$ and $$1,200$ in February

$$ Assume you pay your direct labor in cash during the month the cookies were made

o Example: In January you estimate making $300$ cookies at a $$4$ direct labor cost per cookie. Therefore the cash you pay for direct labor in January is $$1,200$

$$ Assume you rent a kitchen space with a fixed monthly cost of $$400$

$$ Assume a monthly fixed advertising fee of $$200$

$$ Assume a monthly internet hosting fee of $$50$

$$ Assume no returns or refunds of product.

$$ When you make your forecasted balance sheet, assume $$600$ depreciation on your equipment