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Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2021, for Hennesaw Lumber, Inc. Hennesaw Lumber, Inc. estimates that its sales in 2021 will be $4,500,000. Interest expense is to remain unchanged at $105,000 and the firm plans to pay cash dividends of $150,000 during 2021. Hennesaw Lumber, Inc.'s income statement for the year ended December 31, 2020 is shown below. The pro forma net profits after taxes for 2015 are _____

Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2021, for Hennesaw Lumber, Inc. Hennesaw Lumber, Inc. estimates that its sales in 2021 will be $4,500,000. Interest expense is to remain unchanged at $105,000 and the firm plans to pay cash dividends of $150,000 during 2021. Hennesaw Lumber, Inc.'s income statement for the year ended December 31, 2020 is shown below. The pro forma net profits after taxes for 2015 are _____

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2021, for Hennesaw Lumber, Inc.

Hennesaw Lumber, Inc. estimates that its sales in 2021 will be $4,500,000. Interest expense is to remain unchanged at $105,000 and the firm plans to pay cash dividends of $150,000 during 2021. Hennesaw Lumber, Inc.'s income statement for the year ended December 31, 2020 is shown below. The pro forma net profits after taxes for 2015 are _____

 

Income Statement Hennesaw Lumber, Inc. For the Year Ended December 31, 2020 Sales Revenue $4,200,000 Less: Cost of goods sold 3,570,000 Gross profits $ 630,000 Less: Operating expenses 210,000 Operating profits $ 420,000 Less: Interest expense 105,000 Net profit before taxes $ 315,000 Less: Taxes (40%) 126,000 Net profits after taxes $ 189,000 Less: Cash Dividends 120,000 To: Retained earnings 2$ 69,000 %24
Transcribed Image Text:Income Statement Hennesaw Lumber, Inc. For the Year Ended December 31, 2020 Sales Revenue $4,200,000 Less: Cost of goods sold 3,570,000 Gross profits $ 630,000 Less: Operating expenses 210,000 Operating profits $ 420,000 Less: Interest expense 105,000 Net profit before taxes $ 315,000 Less: Taxes (40%) 126,000 Net profits after taxes $ 189,000 Less: Cash Dividends 120,000 To: Retained earnings 2$ 69,000 %24
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