Current assetsNet fixed assetsUniversal Products CompanyFinancial Statements, 2021 and Pro Forma 2822 ($ thousands)BALANCE SHEETTotal assetsCurrent liabilitiesLong-term debtOwner's equityTotal liabilities & equityActual2021Net fixed assets in 2022Owner's equity in 2022External funding required for 2022$ 2,9002,000$ 4,900$ 1,0606003,240$4,900Forecast2022$ 3,150$ 1,180500a. Assume that Universal plans to purchase $400,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022.What would be its forecast for net fixed assets in 2022?b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equityduring 2022. What would be its forecast for owner's equity in 2022?c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022? Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next.Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($ thousands)INCOME STATEMENTSalesCost of goods soldOperating expenseDepreciation expense.Interest expenseEarnings before taxTaxNet incomeActual2021Current assetsNet fixed assets.Total assetsCurrent liabilities.Long-term debtOwner's equityTotal liabilities & equity$ 4,8003,50050025070480168$312Forecast2022$ 5,2003,700Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($ thousands)BALANCE SHEETActual2021500260100640224$416$2,9002,000$ 4,900$ 1,0606003,240$ 4,900Forecast2022$ 3,150$ 1,18050057

Fixed assets are observable, durable assets that a business uses in its operations, such as…

Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2822 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before taxi Tax Net income Actual 2021 Current assets Net fixed assets. Total assets Current liabilities. Long-term debt Owner's equity Total liabilities & equity $4,800 3,500 500 250 70 480 168 $312 Forecast 2022 $ 5,200 3,700 500 260 100 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($ thousands) BALANCE SHEET Actual 2021 640 224 $416 $ 2,900 2,000 $ 4,900 $ 1,060 600 3,240 $4,900 Forecast 2022 $3,150 $1,180 500 27

Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2822 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before taxi Tax Net income Actual 2021 Current assets Net fixed assets. Total assets Current liabilities. Long-term debt Owner's equity Total liabilities & equity $4,800 3,500 500 250 70 480 168 $312 Forecast 2022 $ 5,200 3,700 500 260 100 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($ thousands) BALANCE SHEET Actual 2021 640 224 $416 $ 2,900 2,000 $ 4,900 $ 1,060 600 3,240 $4,900 Forecast 2022 $3,150 $1,180 500 27

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

Current assets
Net fixed assets
Universal Products Company
Financial Statements, 2021 and Pro Forma 2822 ($ thousands)
BALANCE SHEET
Total assets
Current liabilities
Long-term debt
Owner's equity
Total liabilities & equity
Actual
2021
Net fixed assets in 2022
Owner's equity in 2022
External funding required for 2022
$ 2,900
2,000
$ 4,900
$ 1,060
600
3,240
$4,900
Forecast
2022
$ 3,150
$ 1,180
500
a. Assume that Universal plans to purchase $400,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022.
What would be its forecast for net fixed assets in 2022?
b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equity
during 2022. What would be its forecast for owner's equity in 2022?
c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022?

Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next.
Universal Products Company
Financial Statements, 2021 and Pro Forma 2022 ($ thousands)
INCOME STATEMENT
Sales
Cost of goods sold
Operating expense
Depreciation expense.
Interest expense
Earnings before tax
Tax
Net income
Actual
2021
Current assets
Net fixed assets.
Total assets
Current liabilities.
Long-term debt
Owner's equity
Total liabilities & equity
$ 4,800
3,500
500
250
70
480
168
$312
Forecast
2022
$ 5,200
3,700
Universal Products Company
Financial Statements, 2021 and Pro Forma 2022 ($ thousands)
BALANCE SHEET
Actual
2021
500
260
100
640
224
$416
$2,900
2,000
$ 4,900
$ 1,060
600
3,240
$ 4,900
Forecast
2022
$ 3,150
$ 1,180
500
57

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