Prepare journal entries for items $1-13.$

Post this information to T$-$accounts.

Prepare a projected balance sheet as of the end of the day on March $31,2006.$

Prepare a statement of projected cash receipts and disbursements for the period April $1,2006,$ to March $31,2007.$

$$Prepare a projected income statement for the year ending March $31,2007,$ and a projected balance sheet as of March $31,2007.$

What additional information do you think you need to prepare this projected income statement and projected balance? Why do you need that information?THE GARDEN PLACE

In January $2006,$ Mary Jane Bowers was reviewing her plans for the April $1$ opening of a

garden center in Lynchburg, Virginia. She had selected Lynchburg as the town for a new home,

after deciding to leave the large, northern city where she and her husband, John, had both worked

for the past $10$ years. Mary Jane had a degree in horticulture and had worked for a large chemical

company in its agricultural$-$herbicide division. Along with the decision to move, she had decided

to change her work status as well. She wanted to devote her working days to something she

enjoyed and was passionate about. Thus, she decided to go into business for herself, starting a

retail garden store selling plants, trees, and shrubs.

Mary Jane accumulated information on upscale retail garden stores from a number of

sources, talked to suppliers, looked at potential locations, and established a banking relationship

with the Campbell National Bank. She wanted to make sure she had enough money to get the

business off to a good start. Mary Jane had heard stories about many small businesses that failed

because they were undercapitalized.

After careful study and analysis, Mary Jane made the following projections for the first

year of operations of the Garden Place, Inc.:

April $1,2006-$ The business would be incorporated, and Mary Jane and John would

invest $$60,000$ in the company in exchange for shares of common stock.

April $1,2006-$ The Campbell National Bank would loan Garden Place, Inc., $$32,000$ to

be repaid in equal principal payments over four years. The interest rate was $13\%,$ and

interest was payable at the end of each year when the principal payment was made.

April $1,2006-$ A pickup truck would be purchased for $$12,000,$ of which $$10,000$ would

be financed by the Campbell National Bank. The loan would be repaid over three years at

the rate of $$336$ per month for a total of $$12,100.$

April $1,2006-$ Display equipment would be purchased for $$6,000$ cash.

April $1,2006-$ A rototiller would be purchased for $$400$cash

April $1,2006-$ A cash register would be purchased for $$3,600$ cash

April $1,2006-$ An inventory of plants, trees, and shrubs would be purchased for $$60,000$

cash.

The following things were projected to occur between April $1,2006,$ and March $31,$

$2007$:

Cash sales:

Sales on account:

$$340,000$

$$60,000$

$$400,000$

Additional purchase of plants, trees, and shrubs: $$200,000.$ Mary Jane planned to price all

items to give her a $40\%$ gross margin, which is to say that if an item cost her $$6,$ it would

be sold for $$10.$

Advertising expenses would be a percentage of sales, or $$20,000$ for the year.

Mary Jane categorized a group of business expenses as ongoing. They were forecast as

follows:

Monthly payments of $$336$ would be made on the $$10,000$ truck loan.

A principal payment of $$8,000$ would be made on the $$32,000$ bank loan, along with

interest of $$4,160.$