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The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (24%) Net income Dividends $ 23,484 Addition to retained earnings 54,796 762,000 597,000 33,000 $ 132,000 29,000 103,000 24,720 $78,280

The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (24%) Net income Dividends $ 23,484 Addition to retained earnings 54,796 762,000 597,000 33,000 $ 132,000 29,000 103,000 24,720 $78,280

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (24%) Net income Dividends Addition to retained earnings Current assets Cash Accounts receivable Inventory Total Total assets $ 23,484 54,796 Fixed assets Net plant and equipment $438,000 Pro Forma Income Statement Sales Costs Other expenses EBIT Interest CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current liabilities $ 22,140 45,080 106,960 $174,180 $ 762,000 597,000 33,000 $ 132,000 29,000 $ 103,000 24,720 $78,280 Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 56,300 15,500 $71,800 $ 145,000 In 2020, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) $ 122,000 273,380 $395,380 Total $ 612,180 Total liabilities and owners' equity $612,180
Transcribed Image Text:The most recent financial statements for Crosby, Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (24%) Net income Dividends Addition to retained earnings Current assets Cash Accounts receivable Inventory Total Total assets $ 23,484 54,796 Fixed assets Net plant and equipment $438,000 Pro Forma Income Statement Sales Costs Other expenses EBIT Interest CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current liabilities $ 22,140 45,080 106,960 $174,180 $ 762,000 597,000 33,000 $ 132,000 29,000 $ 103,000 24,720 $78,280 Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 56,300 15,500 $71,800 $ 145,000 In 2020, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) $ 122,000 273,380 $395,380 Total $ 612,180 Total liabilities and owners' equity $612,180
In 2020, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes Net income Current assets Cash Accounts receivable Inventory Total current assets Fixed assets Net plant and equipment Total assets EFN Assets Pro Forma Balance Sheet Current liabilities Accounts payable Notes payable Liabilities and Owners' Equity Total current liabilities Long-term de debt Owners' equity Common stock and paid-in surplus Retained earnings Total owner's equity Total liabilities and owners' equity What is the EFN? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. A negative answer should be indicated by a minus sign.)
Transcribed Image Text:In 2020, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes Net income Current assets Cash Accounts receivable Inventory Total current assets Fixed assets Net plant and equipment Total assets EFN Assets Pro Forma Balance Sheet Current liabilities Accounts payable Notes payable Liabilities and Owners' Equity Total current liabilities Long-term de debt Owners' equity Common stock and paid-in surplus Retained earnings Total owner's equity Total liabilities and owners' equity What is the EFN? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. A negative answer should be indicated by a minus sign.)
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