BMAL 530 Excel Project Assignment Instructions Overview Assume ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet but to also provide pro-forma financial statements for...

part A and part B instructions on attached document


BMAL 530 Excel Project Assignment Instructions Overview Assume ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet but to also provide pro-forma financial statements for 2018. In addition, they have asked you to evaluate their company based on the pro-forma statements with regard to ratios. They also want you to evaluate 3 projects they are considering. Their information is as follows: End of the year information: Account 12/31/17 Ending Balance Cash 50,000 Accounts Receivable 175,000 Inventory 126,000 Equipment 480,000 Accumulated Depreciation 90,000 Accounts Payable 156,000 Short-term Notes Payable 12,000 Long-term Notes Payable 200,000 Common Stock 235,000 Retained Earnings solve Additional Information: · Sales for December total 10,000 units. Each month’s sales are expected to exceed the prior month’s results by 5%. The product’s selling price is $25 per unit. · Company policy calls for a given month’s ending inventory to equal 80% of the next month’s expected unit sales. The December 31 2017 inventory is 8,400 units, which complies with the policy. The purchase price is $15 per unit. · Sales representatives’ commissions are 12.5% of sales and are paid in the month of the sales. The sales manager’s monthly salary will be $3,500 in January and $4,000 per month thereafter. · Monthly general and administrative expenses include $8,000 administrative salaries, $5,000 depreciation, and 0.9% monthly interest on the long-term note payable. · The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of sale). · All merchandise purchases are on credit, and no payables arise from any other transactions. One month’s purchases are fully paid in the next month. · The minimum ending cash balance for all months is $50,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. · Dividends of $100,000 are to be declared and paid in February. · No cash payments for income taxes are to be made during the first calendar quarter. Income taxes will be assessed at 35% in the quarter. · Equipment purchases of $55,000 are scheduled for March. ABC Company’s management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below: Project 1 Project 2 Project 3 Purchase Price $80,000 $175,000 $22,700 Required Rate of Return 6% 8% 12% Time Period 3 years 5 years 2 years Cash Flows – Year 1 $48,000 $85,000 $13,000 Cash Flows – Year 2 $36,000 $74,000 $13,000 Cash Flows – Year 3 $22,000 $38,000 N/A Cash Flows – Year 4 N/A $26,800 N/A Cash Flows – Year 5 N/A $19,000 N/A Instructions Part A: · Prepare the year-end balance sheet for 2017. Be sure to use proper headings. · Prepare budgets such that the pro-forma financial statements for the first quarter of 2018 may be prepared. · Sales budget, including budgeted sales for April. · Purchases budget, the budgeted cost of goods sold for each month and quarter, and the cost of the March 31 budgeted inventory. · Selling expense budget. · General and administrative expense budget. · Expected cash receipts from customers and the expected March 31 balance of accounts receivable. · Expected cash payments for purchases and the expected March 31 balance of accounts payable. · Cash budget. · Budgeted income statement. · Budgeted statement of retained earnings. · Budgeted balance sheet. Part B: · Calculate using Excel formulas, the NPV of each of the 3 projects. · It is possible that ABC Company may not be able to complete all 3 projects. Therefore, advise ABC Company as to the order in which they should pursue the projects (i.e., which project should ABC Company attempt to do first, second, and last). · Provide justification and analysis as to why you chose the order you did. The analysis must also be done in Excel, not in a separate document. This assignment must be submitted as one Excel document. Note: Your assignment will be checked for originality via the Turnitin plagiarism tool. Page 3 of 3