2. Barry's Superstore wishes to prepare financial plans. Use the financial statements onthe next page and the other information provided below to prepare the financial plans.The following financial data are also available:(1) The firm has estimated that its sales for next year will be $130,000.(2) The firm expects to pay $30,000 in cash dividends.(3) The firm wishes to maintain a minimum cash balance of $25,000.(4) Accounts receivable represent approximately 20% of annual sales.(5) The firm's ending inventory represents 60% of Cost of Goods Sold.(6) A new machine costing $15,000 will be purchased next year.(7) Accounts payable will increase by 5%.(8) Unearmed Revenue will be earned.(9) Notes Payable would decrease by $5000.(10) Short-Term Investments and common stock will remain unchanged.Requirement:a. Prepare a pro forma income statement for the year ended December 31, 2021, usingthe percent-of-sales method. Tax Rate is expected to be 15%.b. Prepare a pro forma balance sheet dated December 31, 2021, using the judgmentalapproach.c. Analyze these statements, and discuss the resulting external financing required BARRY'S SUPERSTOREBARRY'S SUPERSTOREComparative Year-End Income StatementsComparative Year-End Balance SheetsPrior YearCurrent YearPrior Year Current YearAssets:CashNet Sales$100,000$120,000Cost of Goods Sold50.00060,000$90,000$110,000Gross Profit50,00060,000Accounts Receivable20,00030,00035,00015,000160,00040,000$200.000Inventory40,0005,00020,000200.00050,000$250.000Rent ExpenseDepreciation Expense5,500Short-Term Investments2.5003,600Total Current AsstesSalaries ExpenseUtlity Expense3,0005,400EquipmentTotal Assets1.5002,500Operating Income38,00043,000Liabilities:$ 75.00025.000100,000Accounts Payable$ 60.000Interest Expense3,0002,000Unearned Revenue10.000Income Tax Expense70,0005.000$ 30,0006,000Total Current LiabilitiesNet Income$ 35,000Notes PayableTotal Liabilities40,000110,00050,000150.000Stockholder EquityCommon Stock75,00080.000Ending Retained EarningsTotal Stockholder EquityTotal Liabilities and Stockholder Equity20.000100.00015,00090,000$200.000$250.000

2. Barry's Superstore wishes to prepare financial plans. Use the financial statements on the next page and the other information provided below to prepare the financial plans. he following financial data are also available: 1) The firm has estimated that its sales for next year will be $130,000. 2) The firm expects to pay $30,000 in cash dividends. 3) The firm wishes to maintain a minimum cash balance of $25,000. 4) Accounts receivable represent approximately 20% of annual sales. 5) The firm's ending inventory represents 60% of Cost of Goods Sold. 6) A new machine costing $15,000 will be purchased next year. 7) Accounts payable will increase by 5%. 8) Uneamed Revenue will be earned. 9) Notes Payable would decrease by $5000. 10) Short-Term Investments and common stock will remain unchanged. Requirement: a. Prepare a pro forma income statement for the year ended December 31, 2021, using he percent-of-sales method. Tax Rate is expected to be 15%. b. Prepare a pro forma balance sheet dated December 31, 2021, using the judgmental pproach

2. Barry's Superstore wishes to prepare financial plans. Use the financial statements on the next page and the other information provided below to prepare the financial plans. he following financial data are also available: 1) The firm has estimated that its sales for next year will be $130,000. 2) The firm expects to pay $30,000 in cash dividends. 3) The firm wishes to maintain a minimum cash balance of $25,000. 4) Accounts receivable represent approximately 20% of annual sales. 5) The firm's ending inventory represents 60% of Cost of Goods Sold. 6) A new machine costing $15,000 will be purchased next year. 7) Accounts payable will increase by 5%. 8) Uneamed Revenue will be earned. 9) Notes Payable would decrease by $5000. 10) Short-Term Investments and common stock will remain unchanged. Requirement: a. Prepare a pro forma income statement for the year ended December 31, 2021, using he percent-of-sales method. Tax Rate is expected to be 15%. b. Prepare a pro forma balance sheet dated December 31, 2021, using the judgmental pproach

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A. What is the liquidity position of the company? Support your answer with relevantratios B. What is the Cash Conversion Cycle for the company? Assume a 360-day year. C. Explain what is meant when a business activity has high operating gearing, andwhat are the implications for a business with high operating gearing?
Dolente Ltd is a small company which designs, manufactures and sells innovative electronic instruments. The directors of the company have discussed the financial statements prepared for the year ended 31st March 2020 and have made the following remarks.“We are surprised to see that we have a loss for the year as our bank balance seems to be healthy and has increased from the 2019 figure”. task: Using the information provided by the cash flow statement, comment on the remarks of the directors on the results for the year
A financial adviser is reviewing one of her client's accounts. The client has been investing $1,000 at the end of every quarter for the past Il years in a fund that has averaged 7.3% compounded quarterly. How much money does the client have in his account? Construct a cash flow diagram and use a formula.
Please give correct answer
i need the answer quickly
You are creating a pro forma balance sheet for the upcoming year. You have already prepared a pro forma income statement, and are predicting total assets will increase by $185,000 due to the increase in sales you are anticipating. How will you choose to finance this new growth in order to make sure the balance sheet balances?
Kate is considering expanding and bringing in several employees. To do this she will need a larger facility and to purchase more equipment. Which means additional financing. Answer this: look at the financial statements as if you were a banker considering her for a loan comment on your findings and use calculations to support your answer.
The pictures is the formula and example. Compute the additional funds needed. JHOPE "I am your hope" Company has 10% net profit margin on sales in previous years and expects to maintain the same next year. The Business is expected to increase its sales level from P1,000,000 to P1 255 000. The percentages of current sales and current liabilities that have direct relationship with sales are 60% and 35%, respectively. Out of the total earnings at are expected to be realized next year, 25% will be retumed to the shareholders in the form of dividends. Compute the following: 5. Projected increase in current assets 6. Spontaneous increase in current liabilities 7. Increase in retained earings 8. Additional fund needed.
Best Exports has noticed their current year net income is only $60,000. In order to get a loan from their bank to assist the business they will need to provide a statement of cash flows. In reviewing the statement of cash flows, you notice a large increase ($80,000) in accounts receivable due to two of your largest customers being behind in payments. Since the bank looks at the operating activities, this increase will create concern. You make a suggestion to reclassify the accounts receivables to long-term, thus removing them from current assets will increase the net cash from operations. Under what circumstances would this reclassification be considered ethical or unethical? Support your selection by finding an article which explains your choice.
Aaron Heath is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training services company that will offer tutorial services over the Internet. Aaron expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the Internet assistance. Thereafter, he expects demand to stabilize. The following table presents the expected cash flows: Year of Operation Year 1 Cash Inflow Cash Outflow $13,100 Year 2 19,200 Year 3 Year 4 22,000 22,000 $ 8,700 11,700 12,800 12,800 In addition to these cash flows, Aaron expects to pay $20,800 for the equipment. He also expects to pay $3,600 for a major overhaul and updating of the equipment at the end of the second year of operation. The equipment is expected to have a $1,500 salvage value and a four-year useful life. Aaron desires to earn a rate of return of 10 percent. (PV of $1 and PVA of $1) (Use…
At the beginning of the current year, a company issued stock for $150,000 and borrowed $80,000 from the bank. By the end of the year, the company had provided services of $83,000 for cash, paid employee salaries of $39,000, and paid utilities of $13,000. Determine the amount of financing cash flows the company will report in the current year. (Cash outflows should be indicated with a minus sign.) Financing cash flows
Cash flow identity. Use the data from the following financial statements in the popup window, . The company paid interest expense of $17,100 for 2017 and had an overall tax rate of 40% for 2017. Verify the cash flow identity: cash flow from assets = cash flow to creditors + cash flow to owners The cash flow from assets is $ 24,380. (Round to the nearest dollar.) The cash flow to creditors is $ (Round to the nearest dollar.)