Use the information below to complete the attached spreadsheet (above, cannot include excel files) A complete budget
Question:
Use the information below to complete the attached spreadsheet (above, cannot include excel files)
A complete budget worksheet for Hannah & Maggie Inc. (sales budget, inventory budget, cash budget)
A budgeted Pro Forma Income Statement for the three-month period ending March 31, 2020. (Calculate Net Income)
A budgeted Balance Sheet for March 31, 2020.
Problem:Hannah & Maggie Inc.
Hannah & Maggie are independent recording artists who sell their music wholesale for a living. In December Hannah found a Neumann record cutting machine on sale for $25,000. The machine can be used to transfer digital music to vinyl records.
Hannah and Maggie think their new album would sound amazing (and sell well) as an LP, but they need a loan to purchase the machine. A local bank is agreeable, but requires both current (2019) and budgeted (3 months in 2020) financial statements.
Based on the following information from Hannah & Maggie, construct the banker's report using the excel spreadsheet provided (seriously, use the spreadsheet!).
Balance Sheet
December 31, 2019
Cash $50,000
Accounts Receivable 31,000
Inventory 12,000
Fixed Assets 37,000
Total Assets $130,000
Accounts Payable $22,500
Accrued Credit Fees 9,200
Common Stock 46,800
Retained Earnings 51,500
Total Liab & Equity $130,000
2020 Sales Forecast
January $74,000
February $82,000
March $58,000
April $54,000
May $80,000
June $67,000
July $70,500
Additional Information:
a. Everyone who buys H&M's music pays with a credit card. H&M collect 35% in the month of the sale and 65% in the month after the sale.
b. The credit card sales also mean that H&M incur a 6.2% sales fee. The sales fee is due one month after the sale.
c. The cost of sales is 42% of (current month) sales.
d. To make sure they don't run out of music to sell at shows, Hannah & Maggie plan to maintain inventory at the sales requirements for the next two months' budgeted sales.
e. Hannah & Maggie use a credit card for all their purchases; the duo pays off their balance in full the following month.
f. Hannah & Maggie pay their manager 5% of sales each month.
g. In addition to the variable management cost, the duo incurs fixed expenses of $22,000 per month, $1500 of which is for depreciation of fixed assets.