the pro forma income statement, and the balance sheet still have to be completed. The following information is available as 12/31/X8. Prior Year Balance Sheet Assets Cash $45,000 Accounts Receivable $55,000 Materials Inventory $40,000 Work-in-Process Inventory $30,000 Finished Goods Inventory $36,000 Prepaid Expenses $20,000 Plant and Equipment $500,000 Accumulated Depreciation ($140,000) Other Assets $22,000 Total Assets $608,000 Liabilities and Equity Accounts Payable $103,000 Other Current Liabilities $42,000 Income Taxes Payable $25,000 Long-Term Debt $300,000 Total Liabilities $470,000 Common Stock $100,000 Retained Earnings $38,000 Total Equity $138,000 Total Liabilities and Equity $608,000 Information From Recent Budgets for the Coming Year Projected sales are $2,080,000 (13,000 units). Projected direct materials purchases are $525,000. Projected direct materials usage is $510,000. Projected direct labor expense is $420,000. Projected overhead is $390,000. Projected selling expenses are $130,000. Projected administrative expenses are $310,000. Projected cash collections are $1,805,000. Projected payments for materials (accounts payable) are $550,000. Projected payments for other operating expenses (other current liabilities) are $1,155,000. Projected depreciation expense is $60,000 and is already included in manufacturing overhead. Additional Information That Is Available The expected tax rate is 20%. The company is planning a stock issue of $50,000. Income taxes are paid 3 months after year-end. The company anticipates purchasing a new patent for $20,000 during the year. Work-in-Process Inventory is expected to decrease by $2,500. Finished Goods Inventory is expected to increase by $9,000. Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000. Investment Information A purchase of additional equipment for $80,000 is expected on January 2, 20X9. The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000. Long-Term Debt Information All long-term debt will have a 9% annual rate. A payment of $50,000 including both principal and interest will be made on December 31, 20X9. PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.

the pro forma income statement, and the balance sheet still have to be completed. The following information is available as 12/31/X8. Prior Year Balance Sheet Assets Cash $45,000 Accounts Receivable $55,000 Materials Inventory $40,000 Work-in-Process Inventory $30,000 Finished Goods Inventory $36,000 Prepaid Expenses $20,000 Plant and Equipment $500,000 Accumulated Depreciation ($140,000) Other Assets $22,000 Total Assets $608,000 Liabilities and Equity Accounts Payable $103,000 Other Current Liabilities $42,000 Income Taxes Payable $25,000 Long-Term Debt $300,000 Total Liabilities $470,000 Common Stock $100,000 Retained Earnings $38,000 Total Equity $138,000 Total Liabilities and Equity $608,000 Information From Recent Budgets for the Coming Year Projected sales are $2,080,000 (13,000 units). Projected direct materials purchases are $525,000. Projected direct materials usage is $510,000. Projected direct labor expense is $420,000. Projected overhead is $390,000. Projected selling expenses are $130,000. Projected administrative expenses are $310,000. Projected cash collections are $1,805,000. Projected payments for materials (accounts payable) are $550,000. Projected payments for other operating expenses (other current liabilities) are $1,155,000. Projected depreciation expense is $60,000 and is already included in manufacturing overhead. Additional Information That Is Available The expected tax rate is 20%. The company is planning a stock issue of $50,000. Income taxes are paid 3 months after year-end. The company anticipates purchasing a new patent for $20,000 during the year. Work-in-Process Inventory is expected to decrease by $2,500. Finished Goods Inventory is expected to increase by $9,000. Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000. Investment Information A purchase of additional equipment for $80,000 is expected on January 2, 20X9. The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000. Long-Term Debt Information All long-term debt will have a 9% annual rate. A payment of $50,000 including both principal and interest will be made on December 31, 20X9. PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.

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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Prior Year Balance Sheet

Assets
Cash	$45,000
Accounts Receivable	$55,000
Materials Inventory	$40,000
Work-in-Process Inventory	$30,000
Finished Goods Inventory	$36,000
Prepaid Expenses	$20,000
Plant and Equipment	$500,000
Accumulated Depreciation	($140,000)
Other Assets	$22,000
Total Assets	$608,000

Liabilities and Equity

Accounts Payable	$103,000
Other Current Liabilities	$42,000
Income Taxes Payable	$25,000
Long-Term Debt	$300,000
Total Liabilities	$470,000
Common Stock	$100,000
Retained Earnings	$38,000
Total Equity	$138,000
Total Liabilities and Equity	$608,000

Information From Recent Budgets for the Coming Year

Projected sales are $2,080,000 (13,000 units).
Projected direct materials purchases are $525,000.
Projected direct materials usage is $510,000.
Projected direct labor expense is $420,000.
Projected overhead is $390,000.
Projected selling expenses are $130,000.
Projected administrative expenses are $310,000.
Projected cash collections are $1,805,000.
Projected payments for materials (accounts payable) are $550,000.
Projected payments for other operating expenses (other current liabilities) are $1,155,000.
Projected depreciation expense is $60,000 and is already included in manufacturing overhead.

Additional Information That Is Available

The expected tax rate is 20%.
The company is planning a stock issue of $50,000.
Income taxes are paid 3 months after year-end.
The company anticipates purchasing a new patent for $20,000 during the year.
Work-in-Process Inventory is expected to decrease by $2,500.
Finished Goods Inventory is expected to increase by $9,000.
Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000.

Investment Information

A purchase of additional equipment for $80,000 is expected on January 2, 20X9.
The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000.

Long-Term Debt Information

All long-term debt will have a 9% annual rate.
A payment of $50,000 including both principal and interest will be made on December 31, 20X9.

PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.

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