what is the answer of a? 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 methData table(Click on the icon herein order to copy the contents of the data table below into a spreadsheetProvincial Imports, Inc. Income Statementfor the Year Just Ended$5,006,0002,741,000Sales revenueLess: Cost of goods soldGross profitsLess: Operating expenses$2,265,000855,000...$1,410,000Operating profitsLess: Interest expense1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales meth201,000Net profits before taxes$1,209,000Complete the pro forma income statement for next year below: (Round to the nearest dollar.)Less: Taxes (rate = 40%)483,600Net profits after taxes$725,400Pro Forma Income StatementLess: Cash dividends253,890Provincial Imports, Inc.To retained earnings$471,510for Next Year(Click on the icon here Din order to copy the contents of the data table below into a spreadsheet(percent-of-sales method)Provincial Imports, Inc. Balance SheetSales$for the Year Just EndedLess: Cost of goods soldAssetsLiabilities and Stockholders' EquityCash$190,000Accounts payable$700,Gross profits Integrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income staDalabieInformation 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 perdOperating profitsLess: Interest expense$1,410,000201,000Net profits before taxesLess: Taxes (rate = 40%)$1,209,000483,600Net profits after taxes$725,400Less: Cash dividends253,890To retained earnings$471,510(Click on the icon herein order to copy the contents of the data table below into a spreadsheet.)Provincial Imports, Inc. Balance Sheetfor the Year Just EndedAssetsLiabilities and Stockholders' EquityLess: Cost of goods SOidAccounts payableTaxes payableNotes payableCash$190,000$700,000Gross profitsMarketable securities230,00095,000Less: Operating expensesAccounts receivable635,000205,000Inventories508,000Other current liabilities4,800Operating profitsTotal current assets$1,563,000Total current liabilities$1,004,800Less: Interest expenseNet fixed assets1,408,000Long-term debt512,200Net profits before taxesCommon stock77,000Retained earnings1,377,000Less: Taxes (rate = 40%)%3DTotal assets$2,971,000Total liabilities and equity$2,971,000Net profits after taxesLess: Cash dividends (35%)To Retained earnings%24%24%24%24

% of Cost of Goods sold = Cost of Goods SoldSalesx100 % of Operating Expense = Operating…

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. elated to financial projections for next year is as follows: sales are $6,006,000. ods sold last year includes $998,000 in fixed costs. expense last year includes $246,000 in fixed costs. pense will remain unchanged. vill pay cash dividends amounting to 35% of net profits after taxes. inventories will double. e securities, notes payable, long-term debt, and common stock will remain unchanged. receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. nputer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,000. ate will remain at 40%. pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales met Data table (Click on the icon here O in order to copy the contents of the data table below into a sprear Provincial Imports, Inc. Income Statement for the Year Just Ended Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense $5,006,000 2,741,000 $2,265,000 . .. ... 855,000 $1,410,000 pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales met 201.000 Net profits before taxes Less: Taxes (rate = 40%) $1,209.000 pro forma income statement for next year below: (Round to the nearest dollar.) 483,600 Net profits after taxes $725,400 Pro Forma Income Statement Less: Cash dividends 253,890

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q