Acct 311 - Case 1- 100 Points Assignment - Write a formal report to the Chief Executive Officer responding to the requested items (see below). The report must be submitted in a WORD document (one file only). Note 1: Use of EXCEL will be required to prepare the financial statements and estimate future cash balance. You will need to copy/paste in good form the EXCEL documents into the WORD document. Note 2: The CEO is not an accountant but is well versed in business. Keep this perspective in mind as you prepare your report. Note 3: Assignment time should not exceed 4 hours. Note 4: Approach and format of your report is based on your prior experience and judgement. Case 1 grading will consider the minimal instructor direction being provided Background: After graduating from Metropolitan State University, you were immediately hired by a first-year start-up company, RiverEdge Inc. RiverEdge Inc. had a very successful first year of operation with sales revenue of nearly $12 million. The company sells DNR approved fencing that can be placed along both river and lake shorelines. Initially, the majority shareholder and founder (now RiverEdge Inc.'s Chief Executive Officer), had not planned on hiring an accountant. A local bookkeeping company has completed the basic accounting and prepared the December 31, 2023, adjusted trial balance (see page 2). The Chief Executive Officer (CEO) reviewed the adjusted trial balance and was in disbelief that the cash balance was only $150,000. When the CEO started asking bookkeeper questions it became clear that the company needed to hire a 4-year degreed accountant. Thus, on January 15, 2024, you were hired to become the first accountant for RiverEdge Inc. First Day: Your first day on the job was February 10, 2024, you negotiated this start date so you could provide your current employer an appropriate two-week notice and still have a week to spend with family and friends. At 8:00 a.m. on February 10, you meet with the CEO. The CEO was direct and to the point. The CEO requested the following: 1. Income Statement - For the Year Ended December 31, 2023 Retained Earnings Statement - For the Year Ended December 31, 2023 3. Balance Sheet - As of December 31, 2023 4. Statement of Cash Flows - For the Year Ended December 31, 2023 In addition, the CEO wanted you to estimate the year-ending December 31, 2024, cash balance assuming 2024 sales of $15 million (including an explanation of your assumptions, etc.). The CEO stated that the cash projection for 12/31/2024 should take one hour. Student Note: Do not spend more than one hour preparing the cash projection.Instructor Comment - Cash Projection - Cash projections can be very simplistic or complicated. The key is documenting the key assumptions used when preparing the cash projection. Clear documentation provides the reviewer with a clearer picture for evaluation and recommended adjustments. Instructor Hint: Ask yourself, "... why is the cash balance at the end of 2023 so low relative to the large sales and positive net income?" I suggest you review your statement of cash flows. What information do you have for fiscal year 2024 that may impact your analysis (projection of 12/31/2024 cash balance)? I'd prepare a 12/31/2024 income statement with the projected sales provided and maintain the same gross margin in 12/31/2023 income statement. Use your business intuition/knowledge when estimating the remainder of the income statement. RiverEdge, Inc. Trial Balance December 31, 2023 Debit Credit Cash $ 150,000 Accounts Receivable 1,250,000 Allowance for Doubtful Accounts $ Inventory 1,000,000 Equipment 1,350,000 Accumulated Depreciation - Equipment 103,000 Building 500,000 Accumulated Depreciation - Building 12,000 Land 375,000 Accounts Payable 110,000 Other Current Liabilities 25,000 Common Stock, Par $0.10 200,000 APIC 1,800,000 Retained Earnings Sales Revenue 11,850,000 COGS 5,950,000 Selling Expenses 2, 105,000 Administrative Expenses 1,100,000 Rent Revenue 105,000 Income Tax Expense 425,000 $ 14,205,000 14,205,000 Reminder: This is RiverEdge Inc.'s first year. Therefore, the above accounts would have started the year with a zero balance.The very first transaction made by RiverEdge Inc. was the following sale of common shares. On Jan. 3,2023 Sold 2,000,000 , $0.10 par , common shares, for $1.00 per share. Debit Credit Cash $ 2,000,000 Common Stock $ 200,000 APIC S 1,800,000