Consider the following simplified financial statements for the Wims Corporation (assuming no Income taxes): Income Statement Balance Sheet S 22,000 Assets $ 10,000 Debt Equity $ 10,000 Total Sales $ 4,800 Costs 14,000 5,200 Net Income $8,000 Total $ 10,000 The company has predicted a sales Increase of 11 percent. It has predicted that every Item on the balance sheet will Increase by 11 percent as well. Create the pro forma statements and reconcile them. What is the plug varlable here? Multiple Cholce $8.308
Consider the following simplified financial statements for the Wims Corporation (assuming no Income taxes): Income Statement Balance Sheet S 22,000 Assets $ 10,000 Debt Equity $ 10,000 Total Sales $ 4,800 Costs 14,000 5,200 Net Income $8,000 Total $ 10,000 The company has predicted a sales Increase of 11 percent. It has predicted that every Item on the balance sheet will Increase by 11 percent as well. Create the pro forma statements and reconcile them. What is the plug varlable here? Multiple Cholce $8.308
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Other options include: $8291 or $17380
I keep getting the answer $7428, what am I doing incorrectly?
Transcribed Image Text:Consider the following simplified financlal statements for the Wims Corporation
(assuming no Income taxes):
Income Statement
Balance Sheet
Sales
S 22.000
Assets
$ 10,000 Debt
$ 4,800
14,000
$ 8,000 Total
Costs
5,200
Equity
$ 10.000 Total
Net Income
$ 10.000
The company has predicted a sales Increase of 11 percent. It has predicted that every
Item on the balance sheet will Increase by 11 percent as well.
Create the pro forma statements and reconcile them. What Is the plug varlable here?
Multiple Cholce
$8,308
$8.285
$8.279
Expert Solution
Step 1
| Income Statement | |
| Particulars | Amount |
| Sales (15% increase) (22,000 x 111%) | 24,420 |
| Less: Costs (14,000 x 111%) | 15,540 |
| Net income | 8,880 |
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