elated to financial proje 1) Projected sales are $6,006,000. 2) Cost of goods sold last year includes $998,000 in fixed costs. 3) Operating expense last year includes $246,000 in fixed costs. 4) Interest expense will remain unchanged. 5) The firm will pay cash dividends amounting to 35% of net profits after taxes. 6) Cash and inventories will double. 7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. 8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. 9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00 10) The tax rate will remain at 40%. 1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m . Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of .Analyze these statements, and discuss the resulting external financing required. Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Income Statement for the Year Just Ended Sales revenue $5,006,000 Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense 2,741,000 $2,265,000 855,000 $1,410,000 201,000 Pro Forma Balance Sheet $1,209,000 Net profits before taxes Less: Taxes (rate = 40%) A83 G00 483,600 Provincial Imports, Inc. Net profits after taxes $725,400 for Next Year 253,890 $471,510 Less: Cash dividends (Judgmental Method) To retained earnings Accounts payable (Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) Taxes payable Provincial Imports, Inc. Balance Sheet Notes payable for the Year Just Ended Other current liabilities Assets Liabilities and Stockholders' Equity Cash Marketable securities $190,000 230,000 $700,000 Accounts payable Taxes payable Total current liabilities 95,000 Long-term debt
elated to financial proje 1) Projected sales are $6,006,000. 2) Cost of goods sold last year includes $998,000 in fixed costs. 3) Operating expense last year includes $246,000 in fixed costs. 4) Interest expense will remain unchanged. 5) The firm will pay cash dividends amounting to 35% of net profits after taxes. 6) Cash and inventories will double. 7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. 8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. 9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00 10) The tax rate will remain at 40%. 1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m . Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of .Analyze these statements, and discuss the resulting external financing required. Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Income Statement for the Year Just Ended Sales revenue $5,006,000 Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense 2,741,000 $2,265,000 855,000 $1,410,000 201,000 Pro Forma Balance Sheet $1,209,000 Net profits before taxes Less: Taxes (rate = 40%) A83 G00 483,600 Provincial Imports, Inc. Net profits after taxes $725,400 for Next Year 253,890 $471,510 Less: Cash dividends (Judgmental Method) To retained earnings Accounts payable (Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) Taxes payable Provincial Imports, Inc. Balance Sheet Notes payable for the Year Just Ended Other current liabilities Assets Liabilities and Stockholders' Equity Cash Marketable securities $190,000 230,000 $700,000 Accounts payable Taxes payable Total current liabilities 95,000 Long-term debt
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
could please explain the solution steps of Pro Forma
Provincial Imports, Inc.
for Next Year
(Judgmental Method)
for example how can I find account payable taxes payable notes payable.....
![(5) The firm will pay cash dividends amounting to 35% of net profits after taxes.
(6) Cash and inventories will double.
(7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged.
(8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.
(9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,000
(10) The tax rate will remain at 40%.
a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of
c. Analyze these statements, and discuss the resulting external financing required.
Less. Operaling expenses
OJ3,000
$1,410,000
Operating profits
Less: Interest expense
201,000
$1,209,000
Net profits before taxes
Less: Taxes (rate = 40%)
483,600
Net profits after taxes
$725,400
Less: Cash dividends
253,890
To retained earnings
$471,510
(Click on the icon here D
in order to copy the contents of the data table below into a spreadsheet.)
Accounts payable
$
Provincial Imports, Inc. Balance Sheet
Taxes payable
for the Year Just Ended
Notes payable
Assets
Liabilities and Stockholders' Equity
Accounts payable
Taxes payable
Notes payable
Cash
$190,000
$700,000
Other current liabilities
Marketable securities
230,000
95,000
Total current liabilities
$
Accounts receivable
635,000
205,000
Inventories
508,000
Other current liabilities
4,800
Long-term debt
$1,563,000
$1,004,800
512,200
Total current assets
Total current liabilities
Common stock
Net fixed assets
1,408,000
Long-term debt
Retained earnings
Common stock
77,000
Retained earnings
1,377,000
External funds required
Total assets
$2,971,000
Total liabilities and equity
$2,971,000
Total liabilities and stockholders' equity
24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95d149ba-e88b-4be9-8c76-08ad76f2bce7%2F2544ed0e-16e8-4035-b618-3f18649b12eb%2Fp1tnwku_processed.png&w=3840&q=75)
Transcribed Image Text:(5) The firm will pay cash dividends amounting to 35% of net profits after taxes.
(6) Cash and inventories will double.
(7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged.
(8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.
(9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,000
(10) The tax rate will remain at 40%.
a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of
c. Analyze these statements, and discuss the resulting external financing required.
Less. Operaling expenses
OJ3,000
$1,410,000
Operating profits
Less: Interest expense
201,000
$1,209,000
Net profits before taxes
Less: Taxes (rate = 40%)
483,600
Net profits after taxes
$725,400
Less: Cash dividends
253,890
To retained earnings
$471,510
(Click on the icon here D
in order to copy the contents of the data table below into a spreadsheet.)
Accounts payable
$
Provincial Imports, Inc. Balance Sheet
Taxes payable
for the Year Just Ended
Notes payable
Assets
Liabilities and Stockholders' Equity
Accounts payable
Taxes payable
Notes payable
Cash
$190,000
$700,000
Other current liabilities
Marketable securities
230,000
95,000
Total current liabilities
$
Accounts receivable
635,000
205,000
Inventories
508,000
Other current liabilities
4,800
Long-term debt
$1,563,000
$1,004,800
512,200
Total current assets
Total current liabilities
Common stock
Net fixed assets
1,408,000
Long-term debt
Retained earnings
Common stock
77,000
Retained earnings
1,377,000
External funds required
Total assets
$2,971,000
Total liabilities and equity
$2,971,000
Total liabilities and stockholders' equity
24
![Information related to financial projections for next year is as follows:
(1) Projected sales are $6,006,000.
(2) Cost of goods sold last year includes $998,000 in fixed costs.
(3) Operating expense last year includes $246,000 in fixed costs.
(4) Interest expense will remain unchanged.
(5) The firm will pay cash dividends amounting to 35% of net profits after taxes.
(6) Cash and inventories will double.
(7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged.
(8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.
(9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00
(10) The tax rate will remain at 40%.
a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of
c. Analyze these statements, and discuss the resulting external financing required.
Data table
(Click on the icon here
in order to copy the contents of the data table below into a spreadsheet.)
Provincial Imports, Inc. Income Statement
for the Year Just Ended
Sales revenue
$5,006,000
Less: Cost of goods sold
Gross profits
Less: Operating expenses
2,741,000
$2,265,000
855,000
..
$1,410,000
Operating profits
Less: Interest expense
201,000
Pro Forma Balance Sheet
Net profits before taxes
Less: Taxes (rate = 40%)
$1,209,000
Provincial Imports, Inc.
483,600
Net profits after taxes
$725,400
for Next Year
Less: Cash dividends
253,890
(Judgmental Method)
To retained earnings
$471,510
Accounts payable
(Click on the icon here D
in order to copy the contents of the data table below into a spreadsheet.)
Taxes payable
Provincial Imports, Inc. Balance Sheet
Notes payable
for the Year Just Ended
Other current liabilities
Assets
Liabilities and Stockholders' Equity
Accounts payable
Taxes payable
Cash
$190,000
$700,000
Total current liabilities
Marketable securities
230,000
95,000
Long-term debt
%24
24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95d149ba-e88b-4be9-8c76-08ad76f2bce7%2F2544ed0e-16e8-4035-b618-3f18649b12eb%2F88gysya_processed.png&w=3840&q=75)
Transcribed Image Text:Information related to financial projections for next year is as follows:
(1) Projected sales are $6,006,000.
(2) Cost of goods sold last year includes $998,000 in fixed costs.
(3) Operating expense last year includes $246,000 in fixed costs.
(4) Interest expense will remain unchanged.
(5) The firm will pay cash dividends amounting to 35% of net profits after taxes.
(6) Cash and inventories will double.
(7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged.
(8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.
(9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,00
(10) The tax rate will remain at 40%.
a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of
c. Analyze these statements, and discuss the resulting external financing required.
Data table
(Click on the icon here
in order to copy the contents of the data table below into a spreadsheet.)
Provincial Imports, Inc. Income Statement
for the Year Just Ended
Sales revenue
$5,006,000
Less: Cost of goods sold
Gross profits
Less: Operating expenses
2,741,000
$2,265,000
855,000
..
$1,410,000
Operating profits
Less: Interest expense
201,000
Pro Forma Balance Sheet
Net profits before taxes
Less: Taxes (rate = 40%)
$1,209,000
Provincial Imports, Inc.
483,600
Net profits after taxes
$725,400
for Next Year
Less: Cash dividends
253,890
(Judgmental Method)
To retained earnings
$471,510
Accounts payable
(Click on the icon here D
in order to copy the contents of the data table below into a spreadsheet.)
Taxes payable
Provincial Imports, Inc. Balance Sheet
Notes payable
for the Year Just Ended
Other current liabilities
Assets
Liabilities and Stockholders' Equity
Accounts payable
Taxes payable
Cash
$190,000
$700,000
Total current liabilities
Marketable securities
230,000
95,000
Long-term debt
%24
24
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