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Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (25%) Net income $4,000,000 3,200,000 $ 800,000 120,000 $ 680,000 170,000 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash Receivables Inventories Total CA Fixed assets Total Assets $ 160,000 Accounts payable 360,000 Line of credit 720,000 Accruals $1,240,000 Total CL 4,000,000 Long-term bonds $5,240,000 Common stock $ 360,000 0 200,000 $ 560,000 1,000,000 RE Total L&E 1,100,000 2,580,000 $5,240,000 Suppose that in 2020 sales increase to $4.6 million and that 2020 dividends will increase to $168,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar. Garlington Technologies Inc. Pro Forma Income Statement December 31, 2020 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (25%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Line of credit $ Accruals $ Total current liabilities $ LT bonds $ Common stock $ Retained earnings $ Total L&E $

Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (25%) Net income $4,000,000 3,200,000 $ 800,000 120,000 $ 680,000 170,000 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash Receivables Inventories Total CA Fixed assets Total Assets $ 160,000 Accounts payable 360,000 Line of credit 720,000 Accruals $1,240,000 Total CL 4,000,000 Long-term bonds $5,240,000 Common stock $ 360,000 0 200,000 $ 560,000 1,000,000 RE Total L&E 1,100,000 2,580,000 $5,240,000 Suppose that in 2020 sales increase to $4.6 million and that 2020 dividends will increase to $168,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar. Garlington Technologies Inc. Pro Forma Income Statement December 31, 2020 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (25%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Line of credit $ Accruals $ Total current liabilities $ LT bonds $ Common stock $ Retained earnings $ Total L&E $

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 18E
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Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (25%) Net income $4,000,000 3,200,000 $ 800,000 120,000 $ 680,000 170,000 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash Receivables Inventories Total CA Fixed assets Total Assets $ 160,000 Accounts payable 360,000 Line of credit 720,000 Accruals $1,240,000 Total CL 4,000,000 Long-term bonds $5,240,000 Common stock $ 360,000 0 200,000 $ 560,000 1,000,000 RE Total L&E 1,100,000 2,580,000 $5,240,000 Suppose that in 2020 sales increase to $4.6 million and that 2020 dividends will increase to $168,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar.
Transcribed Image Text:Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (25%) Net income $4,000,000 3,200,000 $ 800,000 120,000 $ 680,000 170,000 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash Receivables Inventories Total CA Fixed assets Total Assets $ 160,000 Accounts payable 360,000 Line of credit 720,000 Accruals $1,240,000 Total CL 4,000,000 Long-term bonds $5,240,000 Common stock $ 360,000 0 200,000 $ 560,000 1,000,000 RE Total L&E 1,100,000 2,580,000 $5,240,000 Suppose that in 2020 sales increase to $4.6 million and that 2020 dividends will increase to $168,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar.
Garlington Technologies Inc. Pro Forma Income Statement December 31, 2020 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (25%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Line of credit $ Accruals $ Total current liabilities $ LT bonds $ Common stock $ Retained earnings $ Total L&E $
Transcribed Image Text:Garlington Technologies Inc. Pro Forma Income Statement December 31, 2020 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (25%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Line of credit $ Accruals $ Total current liabilities $ LT bonds $ Common stock $ Retained earnings $ Total L&E $
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