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- Barry’s Superstore wishes to prepare financial plans. Use the financial statements on the next page and the other information provided below to prepare the financial plans.
The following financial data are also available:
(1) The firm has estimated that its sales for next year will be $130,000.
(2) The firm expects to pay $30,000 in cash dividends.
(3) The firm wishes to maintain a minimum cash balance of $25,000.
(4) Accounts receivable represent approximately 20% of annual sales.
(5) The firm’s ending inventory represents 60% of Cost of Goods Sold.
(6) A new machine costing $15,000 will be purchased next year.
(7) Accounts payable will increase by 5%.
(8) Unearned Revenue will be earned.
(9) Notes Payable would decrease by $5000.
(10) Short-Term Investments and common stock will remain unchanged.
Requirement:
- Prepare a pro forma income statement for the year ended December 31, 2021, using the percent-of-sales method. Tax Rate is expected to be 15%.
- Prepare a pro forma
balance sheet dated December 31, 2021, using the judgmental approach. - Analyze these statements, and discuss the resulting external financing required.
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- Sales Cost of goods sold Net income Cash flow from operations Cash Marketable securities Accounts receivable Inventories Total current assets Accounts payable Accrued liabilities Total current liabilities 275,161 253, 201 (159,054) (59,225) 341,580 342, 258 21,495 6,525 711,858 29, 308 44,806 74,114 a. Calculate the current and quick ratio at the end of each year. Note: Round your answers to 1 decimal place. b. Assuming a 365-day year for all calculations, compute the following: 1. The collection period each year based on sales. a. Current ratio a. Quick ratio b1. Collection period b2. Inventory turnover (X) b2. Payables period (days) b3. Days' sales in cash b4. Gross margin b4. Profit margin 462,913 345, 284 (403,909) (20,933) 269,372 37,300 35,798 72,506 414,976 23,158 125, 251 148,409 2. The inventory turnover and the payables period each year based on cost of goods sold. 3. The days' sales in cash each year. 4. The gross margin and profit margin each year. Note: Round your answers…BALANCE SHEET ANALYSIS Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.2x Days sales outstanding: 36 days Inventory turnover ratio: 7x Fixed assets turnover: 2.5x Current ratio: 1.5x Gross profit margin on sales: (Sales- Cost of goods sold)/Sales = 20% Calculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent. Balance Sheet Cash Accounts receivable. Inventories Fixed assets Total assets Sales $300,000 Current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Cost of goods sold 45,000 90,000Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements for 2025 are provided below. Cash COMPARATIVE BALANCE SHEETS Accounts receivable Inventory Property, plant, and equipment Less accumulated depreciation Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 12/31/25 $608000 (320000) $408000 360000 384000 288000 $1440000 $176000 352000 360000 216000 336000 $1440000 INCOME STATEMENT For the Year Ended December 31, 2025 12/31/24 $960000 (304000) $192000 216000 480000 656000 $1544000 $96000 392000 600000 216000 240000 $1544000
- Supply the missing components of the Statement of Financial Position and Sales information using the following financial data:Debt ratio: 50%Current ratio: 1.8×Total assets turnover: 1.5×Days sales outstanding: 36.5 days*Gross profit margin on sales: (Sales − Cost of goods sold)/Sales = 25%Inventory turnover ratio: 5×*Calculation is based on a 365-day year.Statement of Financial Position(in Thousands)Cash ________Accounts payable_________Accounts receivable ________Long-term debt PhP120,000Inventories ________Common stock_________Fixed assets ________Retained earnings 195,000Total assets PhP600,000Total liabilities and equity _________Sales _______Cost of goods sold _________Calculate the activity and liquidity ratios for P for the year ended 31 December 20X9. Revenue Gross profit Inventory Trade receivables Trade payables Cash Short-term investments Other current liabilities $m 1,867.5 489.3 147.9 393.4 275.1 53.8 6.2 284.3 Current ratio= Current assets Current liabilities Inventory days Inventory days = inventory+ cost of sales × 365 Receivable days Receivable days - receivables + credit sales x 365 Payable days Payable days = payables ÷ credit purchases x 365.Comparative income statements and balance sheets for F&N are shown below ($ millions): Year 2 Year 1 Income Statement $19,889 6,204 Net sales. $20,092 6,044 Cost of goods Gross profit. Selling, general, and administrative expense Depreciation and amortization expense Interest expense (revenue) 14,048 7,893 803 (308) 13,685 9,221 773 292 3,399 1,222 Income before tax 5,660 1,691 Income tax expense. Net income $ 3,969 $ 2,177 Outstanding shares 3,491 3,481
- Northrend Clothiers reported the following selected items at July 31, 2024 (last year's-2023-amounts also given as needed): (Click the icon to view the financial data.) Compute Northrend's (a) acid-test ratio, (b) accounts receivable turnover ratio, and (c) days' sales in receivables for the year ending July 31, 2024. Evaluate each ratio value as strong or weak. Northrend sells on terms of net 30. (Round days' sales in receivables to a whole number.) (Ignore leap-years, using a 365-day where needed.) (a) Compute Northrend's acid-test ratio. (Round your final answer to two decimal places. Abbreviation used: Avg. = Average; Invest. = Investment, Liab. = Liabilities; Merch. = Merchandise, Receiv. = Receivable; Rev. Revenue.) + + + )+ )+ = Acid-test ratioCalculating Cycles Consider the following financial statement information for the Hop Corporation: Item Beginning Ending Inventory $16,284 $19,108 Accounts Receivable 11,219 13,973 Accounts Payable 13,960 16,676 Net Sales $219,320 Cost of Goods Sold 168,420 Calculate the operating and cash cycles. How do you interpret your answer?Calculate the quick assets (in $) and acid test ratio for the given company. Round ratios to the nearest hundredth. Company CurrentAssets CurrentLiabilities Cash MarketableSecurities AccountsReceivable QuickAssets Acid TestRatio a personal electronics retail store $14,640 $19,600 $2,790 0 $4,430 $ :1
- ces Given the following information, complete the balance sheet shown next. Collection period Days' sales in cash Current ratio Inventory turnover Liabilities to assets Payables period Assets Current assets: Cash Accounts receivable Inventory Total current assets Net fixed assets Total assets (All sales are on credit. All calculations assume a 365-day year. The payables period is based on cost of goods sold.) Note: Round your answers to the nearest whole dollar. Liabilities and shareholders' equity Current liabilities: 71 days 33 days 2.2 times Accounts payable Short-term debt Total current liabilities Long-term debt Shareholders' equity Total liabilities and equity 5 65% 35 days $ $ 1,300,000 2,000,000 7,000,000Given the following: Current Assets $ 18,000 Accounts Receivable $ 3,000 Current Liabilities $ 16,000 Inventory $ 2,000 Net Sales $ 41,000 Total Assets $ 29,000 Net Income $ 6,000 Find the following (round to the nearest hundredth if needed): Current Ratio? Acid test quick ratio? Average days collection ? Asset turover ? Profit Margin on net sales?ces Income statement Sales revenue Cost of goods sold Gross profit Operating expenses and interest expense Pretax income Income tax Net income Balance sheet Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities (no interest) Long-term liabilities (interest rate: 12%) Common stock ($5 par value, 7,500 shares outstanding) Retained earnings Total liabilities and stockholders' equity Return on assets Total asset turnover Net profit margin % Year 2 % $ 220,000 119,500 100,500 59,000 41,500 11,000 $ 30,500 $7,000 15,500 43,000 49,500 $ 115,000 $ 17,500 46,500 37,500 Year 11 $ 174,500 103,000 71,500 54,500 17,000 5,500 $ 11,500 2. Compute return on assets, total asset turnover, and the net profit margin for Year 2. Note: Round your answers to 2 decimal places. $ 8,500 19,500 38,400 41,000 $ 107,400 $ 18,500 46,500 37,500 4,900 13,500 $ 115,000 $ 107,400