. . . . . Cash Accounts Receivable Inventory Prepaid Rent . Prop, Plant & Equip Accum Depr . . $ $ $ $ Total Assets $ 1,070,350.00 You are the Business Manager of Garden Sales, Inc and the bank has asked you to prepare a cash and earnings budget/forecast and Pro-Forma Balance Sheet and Income Statement for the next quarter. After your discussion with the various departments, you have come up with the following information/assumptions: 5 $ Net PP&E S Garden Sales, Inc. December 31, 2017 November 2017 and December 2017 sales were $100,000, each month Sales for the following three months will decrease by $2,200 each month, beginning January through April. Cost of Sales represents 75% of sales, each month. . Cash Operating Expenses are 14% of sales, exclusive of Depreciation expense Depreciation Expense is $4,000, per month and prepaid rent is amortized at $750 per month 50,000.00 135,000.00 73,350.00 12,000.00 900,000.00 (100,000.00) 800,000.00 Account Payable Working Capital Line $ Accrued Interest Payable S Note Payable 5 Common Stock Retained Earnings of the month's sales, 10% is collected as cash with the remaining placed on customer's account. Customer's accounts are usually paid off over a 2 month period (50% each month) beginning the month following the sale The CFO just informed you that one customer has filed bankruptcy therefore, $1,000 from Nov A/R Sales will be written off in Jan to Bad Debt Exp. To maintain sufficient inventory, the company purchases 100% of the next month's cost of sales. They pay for 70%, in cash, in the month they purchase and pay the remaining 30% in the following month. In March, the company is planning on replacing an outdated machine. The new machine will cost $14,000. The old machine originally cost $20,000 with a Net Book Value of 15,000 and will be sold for $5,000 $ S 22.005.00 The Company does not pay or accrue for taxes until the end of December. The Company plans to pay a cash dividend of $6,500 at the end of March. 50,000.00 200,000.00 798,345.00 1.070.350.00 1. Prepare a detailed Cash Budget/Forecast for each month of Jan, Feb and March, 2018 2. Prepare an Income Statement for the 3-month period ending March 2018 (in good form) 3. Prepare a Balance Sheet as of March 31, 2018 (in good form) 4. Assignment must be turned in as HAND WRITTEN document and include this sheet. Assume all operating expenses incurred during the month are paid, in cash, during the same month incurred The Note Payable requires a principal payment of $9,000, plus interest of $750, at the end of March. For this note, no interest is Accrued/Expensed until interest is paid The minimum cash month end balance required according to the bank agreement is $75,000 for any given month beginning Jan 30, 2018. A working capital line of credit is available, up to $25,000, and if needed, money is taken out at the beginning of the month. Interest is % per month. Interest is paid on the working capital line when principal payments are paid on the debt; at the end of any given month. Interest is accrued on the working capital line effective the beginning of the month when money is received. . Check Figures for 03/31 Retained Earnings: $797,229.74 Total Assets: $1,067.230.00