Telnet Corporation is a newly formed computer manufacturer. Telnet plans to begin operations on January 1, Year 2. Selected financial information is available for the preparation of Telnet’s six-month forecasted performance covering the period January 1 to June 30 of Year 2.

Required:
a. Prepare a pro forma income statement to portray the forecasted financial position of Telnet Corporation for the six-month period ended June 30, Year 2.
b. Prepare a pro forma balance sheet as of June 30, Year 2.
c. Prepare a cash forecast analysis as in Exhibit 9A.4 for the six-month period ended June 30, Year2.

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Forecasted monthly sales.. $250,000 Monthly operating expenses Rent for factory Variable overhead 30,500 10,000 22,500 Amortization of patents Selling and administrative expenses Materials.... 500 47,500 125,000 Additional Information 45 days n/30 $100,000 35,000 50% 60,000 40,000 $ 7,000 2. Purchase terms 3. Ending finished goods inventory 4. Ending raw material inventory 5. Effective tax rate... 7. Minimum cash balance required 8. Prepaid expenses on June 30, Year2. 9. No inventory is in process on June 30, Year 2. 10. Sales are made evenly throughout the period 11. Expenses are paid in cash (unless otherwise indicated) 12. Telnet Corporation's balance sheet data on January 1, Year 2, appears as $40,000 Cash Equipment.1,200,000 60,000 Patents.. Shareholders' equity...1,300,000