please use the information to fill in the methods & estimates spreadsheet. thank you!

Two different companies were organized to sell gee-gaws to the public. Both companies expect this to be a widely used device with increasing Sales each year. With increased enhancements, each year, they expect the sales price per unit to increase each year. Both companies expect to sell 25,000 units, at a first year of business. Sales are compounded rate) during each of the next two years. At the same time, the selling price per unit will increase by a compounded annual rate of 10 %. selling price of $1,000 each, during their anticipated to increase by 10 % (in units - at a The same supplier provides the devices to both companies. The cost of the product is 70% of the sales price. Like the sales price, the cost will increase each year. Both companies keepa safety stock equal to 2,000 units at all times. (For example, during the first year each company will purchase 27,000 units - the 25,000 units to be sold plus an additional 2,000 units "just in case." During the second year, 27,500 units will be purchased - 2,000 units will remain from the first year.) Service contracts are available with each hardware device. These contracts cover the device "top to bottom" for a period of four years. The service contract costs $300, for this period, and the price will remain the same for the first three years of business. One- half of all customers purchase the service contract. Selling & Administrative Expenses (Salaries, Advertising, and et. al.) are budgeted to be $2,000,000 during the first year and grow at a compounded rate of 4%. Plant & Equipment costing $900,000 will be purchased at inception and will be depreciated using the Straight-Line method assuming no salvage value. Using an electronic spreadsheet, please complete a three year Budgeted Income Statement for each of the companies using the following assumptions: [12 [12 [21 (4 F G [12] [17] 121 [41 17 12 C [121 J H E A 1 Your Name 2 Accounting Methods & Estimates. 3 Date 25,000 12(1+$G2) 1,000 $ 10 % Sales (units) 10 % Selling Price Plant & Equip $ 900,000 Company Two Year 2 Company One Year 2 Year 3 Year 1 Income Statement Sales Service Contracts Income Statement Sales Year t -12* 13 Year 3 U125 Service Contracts Total Revenues C25 Total Revenues 10 11 UIFO Cost of Goods Sold 12 4% Seling & Admine 10 Depreciation FIFO Cost of Goods Sold 2000.000 ESEZ/SA13 ECE SA14 Seling & Admin Depreciation Bad Debts 2,000,000 4 % 15 13 14 5% Bad Debts 4 % Total Expenses Total Expenses 15 16 $ Net Income Net income 17 18 Service Contracts Service Contracts 18 Revenue Recognized Year 1 Revenue Recognized Year 2 20 S Contracts Signed $12 0.5300 S Contracts Signed Year 2 Year 3 Year 3 Year 1 21 Yr $1250.5 300 B22 0.25 $ H220.4 22 1 $ $ 22 2 3 3 25 24 Total Total $ 26 27 Year 3 Year 1 Year 1 Year 3 Year 2 Year 2 28 Current "Cost of Product (Per Unit) Difference in Net income 29 Betwoen Two Companies 17 017 13 07$ 30 Formula Hints Two different companies were organized to sell gee-gaws to the public. Both companies expect this to be a widely used device with increasing Sales each year. With increased enhancements, each year, they expect the sales price per unit to increase each year. Both companies expect to sell 25,000 units, at a first year of business. Sales are compounded rate) during each of the next two years. At the same time, the selling price per unit will increase by a compounded annual rate of 10 %. selling price of $1,000 each, during their anticipated to increase by 10 % (in units - at a The same supplier provides the devices to both companies. The cost of the product is 70% of the sales price. Like the sales price, the cost will increase each year. Both companies keepa safety stock equal to 2,000 units at all times. (For example, during the first year each company will purchase 27,000 units - the 25,000 units to be sold plus an additional 2,000 units "just in case." During the second year, 27,500 units will be purchased - 2,000 units will remain from the first year.) Service contracts are available with each hardware device. These contracts cover the device "top to bottom" for a period of four years. The service contract costs $300, for this period, and the price will remain the same for the first three years of business. One- half of all customers purchase the service contract. Selling & Administrative Expenses (Salaries, Advertising, and et. al.) are budgeted to be $2,000,000 during the first year and grow at a compounded rate of 4%. Plant & Equipment costing $900,000 will be purchased at inception and will be depreciated using the Straight-Line method assuming no salvage value. Using an electronic spreadsheet, please complete a three year Budgeted Income Statement for each of the companies using the following assumptions: [12 [12 [21 (4 F G [12] [17] 121 [41 17 12 C [121 J H E A 1 Your Name 2 Accounting Methods & Estimates. 3 Date 25,000 12(1+$G2) 1,000 $ 10 % Sales (units) 10 % Selling Price Plant & Equip $ 900,000 Company Two Year 2 Company One Year 2 Year 3 Year 1 Income Statement Sales Service Contracts Income Statement Sales Year t -12* 13 Year 3 U125 Service Contracts Total Revenues C25 Total Revenues 10 11 UIFO Cost of Goods Sold 12 4% Seling & Admine 10 Depreciation FIFO Cost of Goods Sold 2000.000 ESEZ/SA13 ECE SA14 Seling & Admin Depreciation Bad Debts 2,000,000 4 % 15 13 14 5% Bad Debts 4 % Total Expenses Total Expenses 15 16 $ Net Income Net income 17 18 Service Contracts Service Contracts 18 Revenue Recognized Year 1 Revenue Recognized Year 2 20 S Contracts Signed $12 0.5300 S Contracts Signed Year 2 Year 3 Year 3 Year 1 21 Yr $1250.5 300 B22 0.25 $ H220.4 22 1 $ $ 22 2 3 3 25 24 Total Total $ 26 27 Year 3 Year 1 Year 1 Year 3 Year 2 Year 2 28 Current "Cost of Product (Per Unit) Difference in Net income 29 Betwoen Two Companies 17 017 13 07$ 30 Formula Hints