formation related to financial projections for next year is as follows: ) Projected sales are $6,006,000. ) Cost of goods sold last year includes $998,000 in fixed costs. -) Operating expense last year includes $246,000 in fixed costs. ) Interest expense will remain unchanged. ) The firm will pay cash dividends amounting to 35% of net profits after taxes. ) Cash and inventories will double. ) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. )Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sale A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year w 0) The tax rate will remain at 40%. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the perd $1,410,000 201,000 Uperating protits Less: Interest expense Net profits before taxes Less: Taxes (rate = 40%) $1,209,000 483,600 Net profits after taxes $725,400 Less: Cash dividends 253,890 S471.510 To retained earnings (Click on the icon here e in order to copy the contents of the data table below into a spreadsheet.) ... Provincial Imports, Inc. Balance Sheet for the Year Just Ended Liabilities and Stockholders' Equity Assets Less: COSI oI goous soiu Cash Marketable securities $190,000 Accounts payable Taxes payable Notes payable $700,000 Gross profits 230,000 635,000 95,000 205,000 Less: Operating expenses Accounts receivable 508,000 $1,563,000 Total current liabilities 1,408,000 Inventories Other current liabilities 4,800 Operating profits $ Total current assets $1,004,800 Less: Interest expense Net fixed assets Long-term debt 512,200 Common stock Retained earnings Net profits before taxes $ 77,000 1,377,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Integrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income sta
Da
labie
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 sale
(9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year w
(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 perd
Operating profits
Less: Interest expense
$1,410,000
201,000
Net profits before taxes
Less: Taxes (rate = 40%)
$1,209,000
483,600
Net profits after taxes
$725,400
Less: Cash dividends
253,890
To retained earnings
$471,510
(Click on the icon here
in order to copy the contents of the data table below into a spreadsheet.)
Provincial Imports, Inc. Balance Sheet
for the Year Just Ended
Assets
Liabilities and Stockholders' Equity
Less: Cost of goods SOid
Accounts payable
Taxes payable
Notes payable
Cash
$190,000
$700,000
Gross profits
Marketable securities
230,000
95,000
Less: Operating expenses
Accounts receivable
635,000
205,000
Inventories
508,000
Other current liabilities
4,800
Operating profits
Total current assets
$1,563,000
Total current liabilities
$1,004,800
Less: Interest expense
Net fixed assets
1,408,000
Long-term debt
512,200
Net profits before taxes
Common stock
77,000
Retained earnings
1,377,000
Less: Taxes (rate = 40%)
%3D
Total assets
$2,971,000
Total liabilities and equity
$2,971,000
Net profits after taxes
Less: Cash dividends (35%)
To Retained earnings
%24
%24
%24
%24
Transcribed Image Text:Integrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income sta Da labie 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 sale (9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year w (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 perd Operating profits Less: Interest expense $1,410,000 201,000 Net profits before taxes Less: Taxes (rate = 40%) $1,209,000 483,600 Net profits after taxes $725,400 Less: Cash dividends 253,890 To retained earnings $471,510 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Balance Sheet for the Year Just Ended Assets Liabilities and Stockholders' Equity Less: Cost of goods SOid Accounts payable Taxes payable Notes payable Cash $190,000 $700,000 Gross profits Marketable securities 230,000 95,000 Less: Operating expenses Accounts receivable 635,000 205,000 Inventories 508,000 Other current liabilities 4,800 Operating profits Total current assets $1,563,000 Total current liabilities $1,004,800 Less: Interest expense Net fixed assets 1,408,000 Long-term debt 512,200 Net profits before taxes Common stock 77,000 Retained earnings 1,377,000 Less: Taxes (rate = 40%) %3D Total assets $2,971,000 Total liabilities and equity $2,971,000 Net profits after taxes Less: Cash dividends (35%) To Retained earnings %24 %24 %24 %24
ntegrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet : ) and financial projections for use in preparing financial plans for the coming year.
nformation 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 $116,000.
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 meth
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
$5,006,000
2,741,000
Sales revenue
Less: Cost of goods sold
Gross profits
Less: Operating expenses
$2,265,000
855,000
...
$1,410,000
Operating profits
Less: Interest expense
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 meth
201,000
Net profits before taxes
$1,209,000
Complete the pro forma income statement for next year below: (Round to the nearest dollar.)
Less: Taxes (rate = 40%)
483,600
Net profits after taxes
$725,400
Pro Forma Income Statement
Less: Cash dividends
253,890
Provincial Imports, Inc.
To retained earnings
$471,510
for Next Year
(Click on the icon here D
in order to copy the contents of the data table below into a spreadsheet
(percent-of-sales method)
Provincial Imports, Inc. Balance Sheet
Sales
$
for the Year Just Ended
Less: Cost of goods sold
Assets
Liabilities and Stockholders' Equity
Cash
$190,000
Accounts payable
$700,
Gross profits
Transcribed Image Text:ntegrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet : ) and financial projections for use in preparing financial plans for the coming year. nformation 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 $116,000. 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 meth 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 $5,006,000 2,741,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses $2,265,000 855,000 ... $1,410,000 Operating profits Less: Interest expense 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 meth 201,000 Net profits before taxes $1,209,000 Complete the pro forma income statement for next year below: (Round to the nearest dollar.) Less: Taxes (rate = 40%) 483,600 Net profits after taxes $725,400 Pro Forma Income Statement Less: Cash dividends 253,890 Provincial Imports, Inc. To retained earnings $471,510 for Next Year (Click on the icon here D in order to copy the contents of the data table below into a spreadsheet (percent-of-sales method) Provincial Imports, Inc. Balance Sheet Sales $ for the Year Just Ended Less: Cost of goods sold Assets Liabilities and Stockholders' Equity Cash $190,000 Accounts payable $700, Gross profits
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