Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):Income StatementBalance SheetSalesCosts$ 40,000 Assets34,160$26,000DebtEquity$ 7,00019,000Net income $ 5,840Total$26,000Total$26,000The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in theform of a cash dividend. Costs and assets vary with sales, but debt and equity do not.Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediatecalculations and round your answers to the nearest whole dollar amount.)Pro forma income statementSalesCosts$ 4800040992Assets$ 31200Pro forma balance sheetDebt7000Equity19000Net income$ 7008Total$ 31200Total30304What is the external financing needed? (Do not round intermediate calculations. Negative amountshould be indicated by a minus sign.)External financing needed$896

Step 1: Given Value for Calculation Sales = $40,000Costs = $34,160Net Income = $5,840Assets =…

Answered: Consider the following simplified…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
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Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Sales Costs Net income $46,900 41,140 $ 5,760 Balance Sheet Assets $22,700 Debt $ 6,700 Equity 16,000 Sales Costs Net income Total $22,700 Total $22,700 The company has predicted a sales increase of 18 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, ship but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement $ 55,342 Assets Total $ $ GA Pro forma balance sheet 26,786 Debt Equity 26,786 Total
Consider the following income statement for Jordan Corporation:Jordan CorporationIncome Statement Sales₱ 38,000 Costs18,400 Taxable Income₱19,600 Taxes (34%)6,664 Net Income₱12,936 Dividends₱5,200 Addition to Retained Earnings7,736 A 25% growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. What is the projected addition to retained earnings?
Consider the following simplified financial statements for the Yoo Corporation. Assume there are no income taxes and 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. Prepare the pro forma statements and determine the external financing needed. Income statement $ Sales Costs Net income Sales increase Payout rate 36,000 29,800 $ 6,200 Dividends ALL 15% 50% Pro forma income statement Sales Costs Net income Balance sheet 26,400 Debt Equity Total $ 26,400 Total Assets $ Complete the following analysis. Do not hard code values in your calculations. Pro forma balance sheet Debt Assets Total Equity Total $ External financing needed $ 6,300 20,100 26,400
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs Taxable income Taxes (22%) Net income $ 48,000 37,400 $ 10,600 2,332 $ 8,268 Dividends Addition to retained earnings $ 3,100 5,168 A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. Note: Input all answers as positive values. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Sales HEIR JORDAN CORPORATION Pro Forma Income Statement Costs Taxable income Taxes Net income What is the projected addition to retained earnings? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Addition to retained earnings
Consider the following simplified financial statements for the Wesney Corporation (assuming no income taxes): Income Statement Sales Costs $ 30,900 23,060 Net income $7,840 Total Assets Sales Costs Net income Pro forma income statement Balance Sheet $ Debt 25,450 Equity The plug variable is $ 25,450 The company has predicted a sales increase of 12 percent. It has predicted that every item on the balance sheet will increase by 12 percent as well. Assets Create the pro forma statements and reconcile them. (Input all answers as positive values. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Total Total Assets $ 6,950 18,500 $ 25,450 in the amount of What is the plug variable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Pro forma balance sheet Debt Equity Total Debt and Equity
Consider the following simplified financial statements for the Phillips corporation assuming no income taxes: income statement: sales $22,000, cost 14,000, net income $8,000, assets: $9,200, total $9,200, Debt $ 4,900, equity 4,300, total $9,200 Phillips has predicted a sales increase of 11 percent. If has predicted that every item on the balance sheet will increase by 11 percent as well. Calculate the dividend paid.
Consider the following income 'statement for the Mickey Mouse Corporation: Mickey Mouse Corporation Income Statement Sales Costs Taxable income Taxes (22%) Net income Dividends $ 2,200 Addition to retained earnings 5,912 $ 45,600 35,200 HEIR JORDAN CORPORATION Pro Forma Income Statement $ 10,400 2,288 $8,112 The projected sales growth rate is 18 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Do not round) Intermediate calculations and round your answers to the nearest whole number, e.g.. 32.)
Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5× Return on assets (ROA) 8.0% Return on equity (ROE) 12.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: %
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs Taxable income Taxes (22%) Net income Dividends Addition to retained earnings HEIR JORDAN CORPORATION Pro Forma Income Statement $3,500 5,938 Sales Costs Taxable income Taxes Net income $ 53,000 40,900 A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. (Input all answers as positive values. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) $ 12,100 2,662 $ 9,438
Using the DuPont method, evaluate the effects of the following relationships for the Butters Corporation. A.Butters Corporation has a profit margin of 5.5 percent and its return on assets (investment) is 8.75 percent. What is its assets turnover? Round your answer to 2 decimal places. ______ times B.If the Butters Corporation has a debt-to-total-assets ratio of 65.00 percent, what would the firm’s return on equity be? Note: Input your answer as a percent rounded to 2 decimal places. C.What would happen to return on equity if the debt-to-total-assets ratio decreased to 60.00 percent? Input your answer as a percent rounded to 2 decimal places.

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