ExcelProject InstructionsAssumeABC Company has asked you to

ExcelProject InstructionsAssumeABC Company has asked you to not only prepare their 2013 year-end Balance Sheetbut to also provide pro-forma financial statements for 2014. In addition, theyhave asked you to evaluate their company based on the pro-forma statements withregard to ratios. They also want you to evaluate 3 projects they areconsidering. Their information is as follows:Endof the year information:Account12/31/13Ending BalanceCash160,000Accounts Receivable126,000Inventory75,200Equipment745,000Accumulated Depreciation292,460Accounts Payable36,900Short-term Notes Payable18,300Long-term Notes Payable157,225Common Stock450,000Retained EarningssolveAdditional Information:· Salesfor December total 12,000 units. Each month’s sales are expected to exceed theprior month’s results by 5%. The product’s selling price is $15 per unit.· Companypolicy calls for a given month’s ending inventory to equal 80% of the nextmonth’s expected unit sales. The December 31 2012 inventory is 9,400 units,which complies with the policy. The purchase price is $8 per unit.· Salesrepresentatives’ commissions are 10.0% of sales and are paid in the month ofthe sales. The sales manager’s monthly salary will be $3,500 in January and$4,000 per month thereafter.· Monthlygeneral and administrative expenses include $8,000 administrative salaries,$5,000 depreciation, and 0.9% monthly interest on the long-term note payable.· Thecompany 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 iscollected in the month of sale).· Allmerchandise purchases are on credit, and no payables arise from any othertransactions. One month’s purchases are fully paid in the next month.· Theminimum ending cash balance for all months is $140,000. If necessary, thecompany 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 (beforeany repayment). If the ending cash balance exceeds the minimum, the excess willbe applied to repaying the short-term notes payable balance.· Dividendsof $100,000 are to be declared and paid in February.· Nocash payments for income taxes are to be made during the first calendarquarter. Income taxes will be assessed at 35% in the quarter.· Equipmentpurchases of $55,000 are scheduled for March.ABC Company’s management is alsoconsidering 3 new projects consisting of the purchase of new equipment. Thecompany has limited resources, and may not be able to complete make all 3 purchases.The information is as follows for the purchases below.Project 1Project 2Project 3 PurchasePrice$50,000$75,000$32,500RequiredRate of Return12%8%10%TimePeriod3years5years2yearsCashFlows – Year 1$18,000$25,000$20,000CashFlows – Year 2$22,000$20,000$18,000CashFlows – Year 3$22,000$18,000N/ACashFlows – Year 4N/A$16,500N/ACashFlows – Year 5N/A$15,000N/ARequired Action:PartA:Prepare the year-end balance sheetfor 2013. Be sure to use proper headings.Prepare budgets such that thepro-forma financial statements may be prepared.Sales budget, including budgetedsales for April.Purchases budget, the budgeted costof goods sold for each month and quarter, and the cost of the March 31budgeted inventory.Selling expense budget.General and administrative expensebudget.Expected cash receipts from customersand the expected March 31 balance of accounts receivable.Expected cash payments for purchasesand the expected March 31 balance of accounts payable.Cash budget.Budgeted income statement.Budgeted statement of retainedearnings.Budgeted balance sheet.PartB:It is possible that ABC Company maynot be able to complete all 3 projects. Therefore, advise ABC Company asto the order in which they should pursue the projects (i.e., which projectshould ABC Company attempt to do first, second, and last).Providejustification and analysis as to why you chose the order you did. Theanalysis must also be done in Excel, not in a separate document.Thisassignment must be submitted as 1 Excel document.Calculate using Excel formulas, theNPV of each of the 3 projects.

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