The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 percent Interest expense will remain constant, the tax rate and the dividend payout rate will also remain cons sts, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC 2017 Income Statement Sales Costs Other expenses $749,000 584,000 20,000 Earnings before interest and taxes Interest paid $145,000 16,000 Taxable income Taxes (21%) $129,000 27,090 Net income $101,910 $31,592 Dividends Addition to retained earnings 70,318 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable 20,840 Accounts payable 43,780 Notes payable 55,000 14,200 $ 69,200 $132,000 Inventory 3,960 Total Total $ 158,580 Long-term debt Fixed assets Owners equity Net plant and equipment 425,000 Common stock and paid-in surplus $115,500 266,880 $382,380 s 583,580 Total liabilities and owners equity $583,580 Retained earnings Total Total assets in 2017, the firm operated at 80 percent of capacity Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are so'd so that the company has a 100 percent asset utlization. (Do not round intermediate calculations.)
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 percent Interest expense will remain constant, the tax rate and the dividend payout rate will also remain cons sts, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC 2017 Income Statement Sales Costs Other expenses $749,000 584,000 20,000 Earnings before interest and taxes Interest paid $145,000 16,000 Taxable income Taxes (21%) $129,000 27,090 Net income $101,910 $31,592 Dividends Addition to retained earnings 70,318 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable 20,840 Accounts payable 43,780 Notes payable 55,000 14,200 $ 69,200 $132,000 Inventory 3,960 Total Total $ 158,580 Long-term debt Fixed assets Owners equity Net plant and equipment 425,000 Common stock and paid-in surplus $115,500 266,880 $382,380 s 583,580 Total liabilities and owners equity $583,580 Retained earnings Total Total assets in 2017, the firm operated at 80 percent of capacity Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are so'd so that the company has a 100 percent asset utlization. (Do not round intermediate calculations.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30
percent Interest expense will remain constant, the tax rate and the dividend payout rate will also remain
cons sts, other expenses, current assets, and accounts payable increase spontaneously with sales.
CROSBY, INC
2017 Income Statement
Sales
Costs
Other expenses
$749,000
584,000
20,000
Earnings before interest and taxes
Interest paid
$145,000
16,000
Taxable income
Taxes (21%)
$129,000
27,090
Net income
$101,910
$31,592
Dividends
Addition to retained earnings
70,318
CROSBY, INC.
Balance Sheet as of December 31, 2017
Assets
Liabilities and Owners' Equity
Current assets
Current liabilities
Cash
Accounts receivable
20,840 Accounts payable
43,780 Notes payable
55,000
14,200
$ 69,200
$132,000
Inventory
3,960 Total
Total
$ 158,580
Long-term debt
Fixed assets
Owners equity
Net plant and equipment 425,000 Common stock and paid-in surplus $115,500
266,880
$382,380
s 583,580 Total liabilities and owners equity $583,580
Retained earnings
Total
Total assets
in 2017, the firm operated at 80 percent of capacity Construct the pro forma income statement and balance
sheet for the company. Assume that fixed assets are so'd so that the company has a 100 percent asset
utlization. (Do not round intermediate calculations.)
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