Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 43,500 Cost 34,100 Taxable income $ 9,400 Taxes (24%) 2,256 Net income $ 7,144 Dividends $ 2,515 Addition to retained earnings 4,629 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,550 Accounts payable $ 2,400 Accounts receivable 3,800 Notes payable 5,100 Inventory 9,000 Total $ 7,500 Total $ 15,350 Long-term debt $ 24,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 16,000 Net plant and equipment $ 38,000 Retained earnings 5,850 Total $ 21,850 Total assets $ 53,350 Total liabilities and owners’ equity $ 53,350 Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 43,500 Cost 34,100 Taxable income $ 9,400 Taxes (24%) 2,256 Net income $ 7,144 Dividends $ 2,515 Addition to retained earnings 4,629 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,550 Accounts payable $ 2,400 Accounts receivable 3,800 Notes payable 5,100 Inventory 9,000 Total $ 7,500 Total $ 15,350 Long-term debt $ 24,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 16,000 Net plant and equipment $ 38,000 Retained earnings 5,850 Total $ 21,850 Total assets $ 53,350 Total liabilities and owners’ equity $ 53,350 Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| Consider the following income statement for the Heir Jordan Corporation: |
| HEIR JORDAN CORPORATION | ||
| Income Statement | ||
| Sales | $ 43,500 | |
|---|---|---|
| Cost | 34,100 | |
| Taxable income | $ 9,400 | |
| Taxes (24%) | 2,256 | |
| Net income | $ 7,144 | |
| Dividends | $ 2,515 | |
| Addition to |
4,629 |
| The |
| HEIR JORDAN CORPORATION | |||
| Balance Sheet | |||
| Assets | Liabilities and Owners’ Equity | ||
|---|---|---|---|
| Current assets | Current liabilities | ||
| Cash | $ 2,550 | Accounts payable | $ 2,400 |
| 3,800 | Notes payable | 5,100 | |
| Inventory | 9,000 | Total | $ 7,500 |
| Total | $ 15,350 | Long-term debt | $ 24,000 |
| Owners’ equity | |||
| Fixed assets | Common stock and paid-in surplus | $ 16,000 | |
| Net plant and equipment | $ 38,000 | Retained earnings | 5,850 |
| Total | $ 21,850 | ||
| Total assets | $ 53,350 | Total liabilities and owners’ equity | $ 53,350 |
|
Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio |
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