After studying Wave Masters client list and the competitive and economic landscape in the seismic survey data industry, she makes the following financial projections for her new business:

• Sales revenue for FY2021 (i.e. the year ended 31 December 2021): $1,400,000
• FY2021 Amortization of seismic data technology patents: 1% of sales.
• FY2021 Depreciation of seismic survey equipment: 4% of sales.
• FY2021 EBITDA margin: 42%.
• FY2021 effective tax rate: 28%.
• Olivia estimates the following balance sheet accounts at the end of FY2021: Accounts Receivable (equal to 7% of sales) and Accounts Payable (equal to 3% of sales).
• Olivias strong preference is to only make the smallest possible equity injection in FY2021 to ensure the financial viability of Wave Master Inc.
• No dividends will be paid during the course of the year.
• On 1 January 2021, Wave Master purchased $700,000 of seismic survey equipment and $150,000 in related data processing technology patents. To help fund this purchase, the company simultaneously secured a bank loan of $500,000 with a 10% annual interest rate. Olivia does not expect that Wave Master will make any debt repayments this year.
  • As part of the loan agreement, Wave Master must always satisfy two loan covenants:

(1) Maintain a year-end leverage ratio of no greater than 18%; and

(2) Attain a return on equity (ROE) in FY2021 of no higher than 13%.

Note: Wave Master Inc. had no income, assets or liabilities as at 31 December 2020.

Question: Use the template on the following page and the information given above to construct the Projected Balance Sheet for Wave Master Inc.s first year of operations. Please show your working on how you calculated each of these balance sheet items.