Consider the following simplified financial statements for the Wesney Corporation (assuming no income taxes): Income Statement Sales Costs $ Assets $21,900 Debt 45,700 40,100 Equity Net income $ 5,600 Total $ 21,900 Total Balance Sheet The company has predicted a sales increase of 6 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Pro forma income statement Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Sales Costs Net income $ 5,900 16,000 $ 21,900 Assets Total Assets Pro forma balance sheet Debt Equity Total Debt and Equity What is the external financing needed? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Consider the following simplified financial statements for the Wesney Corporation (assuming no income taxes): Income Statement Sales Costs $ Assets $21,900 Debt 45,700 40,100 Equity Net income $ 5,600 Total $ 21,900 Total Balance Sheet The company has predicted a sales increase of 6 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Pro forma income statement Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Sales Costs Net income $ 5,900 16,000 $ 21,900 Assets Total Assets Pro forma balance sheet Debt Equity Total Debt and Equity What is the external financing needed? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

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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Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Balance Sheet Sales $ 25,000 Assets $ 9,200 Debt $ 4,700 Costs 13,800 Equity 4,500 Net income $ 11,200 Total $ 9,200 Total $ 9,200 The company has predicted a sales increase of 9 percent. It has predicted that every item on the balance sheet will increase by 9 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here?
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