1) Projected sales are $6,006,000. 2) Cost of goods sold last year includes $998,000 in fixed costs. 3) Operating expense last year includes $246,000 in fixed costs. 4) Interest expense will remain unchanged. 5) The firm will pay cash dividends amounting to 35% of net profits after taxes. 6) Cash and inventories will double. 7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. 8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. 9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00 10) The tax rate will remain at 40%. 1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m . Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of . Analyze these statements, and discuss the resulting external financing required. Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Income Statement for the Year Just Ended $5,006,000 2,741,000 $2,265,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense 855,000 $1,410,000 201,000 $1,209,000 Pro Forma Balance Sheet Net profits before taxes Less: Taxes (rate = 40%) Provincial Imports, Inc. 483,600 Net profits after taxes $725,400 for Next Year 253,890 $471,510 Less: Cash dividends (Judgmental Method) To retained earnings Accounts payable (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Taxes payable Provincial Imports, Inc. Balance Sheet Notes payable for the Year Just Ended Other current liabilities Assets Liabilities and Stockholders' Equity Cash $190,000 Accounts payable $700,00 Total current liabilities Marketable securities 230,000 Taxes payable 95,00 Long-term deht
1) Projected sales are $6,006,000. 2) Cost of goods sold last year includes $998,000 in fixed costs. 3) Operating expense last year includes $246,000 in fixed costs. 4) Interest expense will remain unchanged. 5) The firm will pay cash dividends amounting to 35% of net profits after taxes. 6) Cash and inventories will double. 7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. 8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. 9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00 10) The tax rate will remain at 40%. 1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m . Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of . Analyze these statements, and discuss the resulting external financing required. Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Income Statement for the Year Just Ended $5,006,000 2,741,000 $2,265,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense 855,000 $1,410,000 201,000 $1,209,000 Pro Forma Balance Sheet Net profits before taxes Less: Taxes (rate = 40%) Provincial Imports, Inc. 483,600 Net profits after taxes $725,400 for Next Year 253,890 $471,510 Less: Cash dividends (Judgmental Method) To retained earnings Accounts payable (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Taxes payable Provincial Imports, Inc. Balance Sheet Notes payable for the Year Just Ended Other current liabilities Assets Liabilities and Stockholders' Equity Cash $190,000 Accounts payable $700,00 Total current liabilities Marketable securities 230,000 Taxes payable 95,00 Long-term deht
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 10P
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Pro Forma Balance Sheet
Provincial Imports, Inc.
for Next Year
(Judgmental Method)?????????????
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