Jim's Espresso expects sales to grow by 10.4% next year. Assume that Jim's pays out 85.9% of its net income. Use the following statements LOADING... and the percent of sales method to forecast: a. Stockholders' equity b. Accounts payable The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Sales $205,430 Costs Except Depreciation (99,920) EBITDA $105,510 Depreciation (6,070) EBIT $99,440 Interest Expense (net) (570) Pretax Income $98,870 Income Tax (34,605) Net Income $64,265 Balance Sheet Assets Cash and Equivalents $14,920 Accounts Receivable 2,010 Inventories 3,950 Total Current Assets $20,880 Property, Plant and Equipment 10,070 Total Assets $30,950 Liabilities and Equity Accounts Payable $1,400 Debt 4,100 Total Liabilities $5,500 Stockholders' Equity 25,450 Total Liabilities and Equity $30,950

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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Question

Jim's Espresso expects sales to grow by

10.4%

next year. Assume that Jim's pays out

85.9%

of its net income. Use the following statements

and the percent of sales method to forecast:

a. Stockholders' equity

b. Accounts payable

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

Income Statement
Sales $205,430
Costs Except Depreciation (99,920)
EBITDA $105,510
Depreciation (6,070)
EBIT $99,440
Interest Expense (net) (570)
Pretax Income $98,870
Income Tax (34,605)
Net Income $64,265

Balance Sheet

Assets
Cash and Equivalents $14,920
Accounts Receivable 2,010
Inventories 3,950
Total Current Assets $20,880
Property, Plant and Equipment 10,070
Total Assets $30,950

Liabilities and Equity
Accounts Payable $1,400
Debt 4,100
Total Liabilities $5,500
Stockholders' Equity 25,450
Total Liabilities and Equity $30,950

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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