Prepare a projected balance sheet and income statement in excel as of the end of the day
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Prepare a projected balance sheet and income statement in excel as of the end of the day on March 31, 2007.
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Mike MacCloud had worked in the operations side of a winery for several years. Having built a strong knowledge of the art of making wine, he had decided to create his own wine label (i.e., brand). For his label, he planned to grow all of his own grapes. He had identified an ideal plot of five acres of land in northern California that had most recently been used to grow soybeans. His initial plans were to lease a nearby building to use as a winery (i.e., a place for processing grapes and fermenting and aging his wine). However, Mike hoped someday to build his own winery and thus would only plant on four acres of land. Mike agreed to lease the building for 10 years at $5,000 per year. It was estimated that the building was worth $32,000 and had a 30-year economic life. The lease contract Mike signed did not mention any bargain purchase option or that Mike might assume ownership of the leased building. The interest rate Mike received on his personal bank account was 5%. When Mike started the business, he opened a checking and savings account for MacCloud Wines Inc. that paid 6% annual interest. The annual interest rate the bank charged was 10%. Mike purchased the five acres of land for $250,000. To finance the transaction, Mike borrowed $180,000 from the bank to be repaid $10,000 annually and a lump sum at the end of three years. In addition, Mike bought from Australia special grapevines at a cost of $10,000 per acre. The transportation costs totaled $2,500. Once Mike had the grapevines, he hired extra help to plant the vines at a cost of $2,000 per acre. While vines might produce a limited amount of grapes during the first five growing seasons, the "young vine" grapes could not be used for wine (or any other commercial purpose). Although Mike would not use these grapes, he would need to spend $1,000 per acre per each of the five years to fertilize and water the vines. If this were not done, the vines would not produce high-quality grapes in the future. Beginning in the sixth growing season the vines would bear a full crop of high-quality grapes. Some vines continued to produce at this level until their 100th growing season. However, generally production began to decline after the 75t growing season. Once production declined, the land would be replanted with a new set of vines. Interestingly, many experts believed that grapes from "old growth" vines (for the type of vines Mike was planting, a vine was "old growth" after it had been planted 50 or more growing seasons) made a higher-quality wine. Once the vines began to produce high-quality grapes, Mike would need to spend $1,500 per acre per year for fertilizing and water. If he did not provide these nutrients, the grapes produced that year would not be of high enough Mike MacCloud had worked in the operations side of a winery for several years. Having built a strong knowledge of the art of making wine, he had decided to create his own wine label (i.e., brand). For his label, he planned to grow all of his own grapes. He had identified an ideal plot of five acres of land in northern California that had most recently been used to grow soybeans. His initial plans were to lease a nearby building to use as a winery (i.e., a place for processing grapes and fermenting and aging his wine). However, Mike hoped someday to build his own winery and thus would only plant on four acres of land. Mike agreed to lease the building for 10 years at $5,000 per year. It was estimated that the building was worth $32,000 and had a 30-year economic life. The lease contract Mike signed did not mention any bargain purchase option or that Mike might assume ownership of the leased building. The interest rate Mike received on his personal bank account was 5%. When Mike started the business, he opened a checking and savings account for MacCloud Wines Inc. that paid 6% annual interest. The annual interest rate the bank charged was 10%. Mike purchased the five acres of land for $250,000. To finance the transaction, Mike borrowed $180,000 from the bank to be repaid $10,000 annually and a lump sum at the end of three years. In addition, Mike bought from Australia special grapevines at a cost of $10,000 per acre. The transportation costs totaled $2,500. Once Mike had the grapevines, he hired extra help to plant the vines at a cost of $2,000 per acre. While vines might produce a limited amount of grapes during the first five growing seasons, the "young vine" grapes could not be used for wine (or any other commercial purpose). Although Mike would not use these grapes, he would need to spend $1,000 per acre per each of the five years to fertilize and water the vines. If this were not done, the vines would not produce high-quality grapes in the future. Beginning in the sixth growing season the vines would bear a full crop of high-quality grapes. Some vines continued to produce at this level until their 100th growing season. However, generally production began to decline after the 75t growing season. Once production declined, the land would be replanted with a new set of vines. Interestingly, many experts believed that grapes from "old growth" vines (for the type of vines Mike was planting, a vine was "old growth" after it had been planted 50 or more growing seasons) made a higher-quality wine. Once the vines began to produce high-quality grapes, Mike would need to spend $1,500 per acre per year for fertilizing and water. If he did not provide these nutrients, the grapes produced that year would not be of high enough
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