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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

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
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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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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