Prepare the following Pro Forma Financial Statements for the proposed new location (pro forma statements in this case are budgeted statements for 2018 based on the new location scenario at the bottom of the page)

Pro Forma Income Statement

Pro Forma Balance Sheet

PEYTON APPROVED PRO FORMA INFORMATION

The company is planning to open another location in 2018 . Prepare pro forma financials for 2018 for the new location using the following information:

1. Cost of leasing commercial space: $1,500 per month.

2. Cost of new equipment: $15,000. Use straight line depreciation assuming a seven-year life. Use full year’s depreciation for the first year.

3. Cost of hiring and training new employees: three at $25,000 each for the first year.

4. Except as noted in 5, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing store (from preliminary statements) except no stock. Retained earnings = net income.

5. Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.

Peyton Approved
Balance Sheet
As of December 31, 2017
Assets					Liabilities and Owners' Equity
	Current Assets:					Current Liabilities:
	Cash	68,520.04				Accounts Payable	23,437.11
	Accounts Receivable	68,719.91				Wages Payable	3,383.28
	Baking Supplies	18,681.70				Interest Payable	211.46
	Merchandise Inventory	1,238.07				Customer Deposit	1,000.00
	Prepaid Rent	2,114.55
	Prepaid Insurance	2,114.55
	Misc. Supplies	170.49
	Other Receivable - Insurance	700.00
	Consignment Inventory	-200
	Total Current Assets		162,059.31			Total Current Liabilities		28,031.85
						Long Term Liabilities:
	Long Term/Fixed Assets:					Notes Payable	5,000.00
	Baking Equipment	12,000.00				Total Long Term Liabilities:		5,000.00
	Accumulated Depreciation	-406.44
	Net Fixed assets		11,593.56			Total Liabilities:		33,031.85
						Common Stock	20,000.00
						Retained Earnings	120,621.02
						Total Equity		140,621.02
	Total Assets:		173,652.87			Total Liabilities & Equity		173,652.87

Peyton Approved
Income Statement
For Year Ended 12/31/2017
Bakery Sales		$ 327,322.55
Merchandise Sales		1,205.64
Total Revenues			328,528.19
Cost of Goods Sold - Baked		105,834.29
Cost of Goods Sold - Merchandise		859.77
Total Cost of Goods Sold			106,694.06
Gross Profit			221,834.13
Operating Expenses:
Loss on disposal of equipment		100.00
Rent Expense		24,549.19
Wages Expense		10,670.72
Misc. Supplies Expense		3,000.46
Business License Expense		2,045.77
Misc. Expense		1,363.84
Depreciation Expense		677.86
Insurance Expense		1,091.08
Advertising Expense		1,549.74
Interest Expense		818.31
Telephone Expense		490.98
Total Operating Expenses:			46,357.95
Net Income			175,476.18