Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma income statement.Create a pro forma Balance Sheet. All items will vary with sales.What is the plug variable in order for this to balance?Suppose no dividend is planned to be issued next year. What is the plug variable? Curry CompanyIncome StatementYear ended 2021Income StatementSalesCostsTaxable IncomeTaxesNet Income$50,00039,450$10,550$2,750$7,800Pro FormaYear 2022 Balance SheetCashAccounts ReceivableInventoryCURRENT ASSETSFixed Assets:Net Fixed AssetsCurry Company.Balance Sheet31-Dec-21TOTAL ASSETSLiabilitiesAccounts PayableNotes PayableCURRENT LIABILITIESLong-Term DebtEquityCommon Stock and paid in capitalRetained EarningsTOTAL CAPITALTotal Liabilities & Equity$5,0003,0006,400$14,400$41,300$55,700$2,4004300$6,700$28,00017,050$3,950$21,000$55,700Pro Forma Dec. 31, 2022

Due to our protocol only first three sub-parts are solved as there are four sub-parts. The plug…

Answered: Assuming costs vary with sales and a 20…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma income statement.
Create a pro forma Balance Sheet. All items will vary with sales.
What is the plug variable in order for this to balance?
Suppose no dividend is planned to be issued next year. What is the plug variable?

Curry Company
Income Statement
Year ended 2021
Income Statement
Sales
Costs
Taxable Income
Taxes
Net Income
$50,000
39,450
$10,550
$2,750
$7,800
Pro Forma
Year 2022

Balance Sheet
Cash
Accounts Receivable
Inventory
CURRENT ASSETS
Fixed Assets:
Net Fixed Assets
Curry Company.
Balance Sheet
31-Dec-21
TOTAL ASSETS
Liabilities
Accounts Payable
Notes Payable
CURRENT LIABILITIES
Long-Term Debt
Equity
Common Stock and paid in capital
Retained Earnings
TOTAL CAPITAL
Total Liabilities & Equity
$5,000
3,000
6,400
$14,400
$41,300
$55,700
$2,400
4300
$6,700
$28,000
17,050
$3,950
$21,000
$55,700
Pro Forma Dec. 31, 2022

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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