MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
15th Edition
ISBN: 9780134479903
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Chapter 4, Problem 4.18P

Learning Goal 5

P4-18 Pro forma balance sheet: Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2020. The firm expects 2020 sales to total $3,000,000. The following information has been gathered:

  1. 1. A minimum cash balance of $50,000 is desired.
  2. 2. Marketable securities are expected to remain unchanged.
  3. 3. Accounts receivable represent 10% of sales.
  4. 4. Inventories represent 12% of sales.
  5. 5. A new machine costing $90,000 will be acquired during 2020. Total depreciation for the year will be $32,000.
  6. 6. Accounts payable represent 14% of sales.
  7. 7. Accruals, other current liabilities, long-term debt, and common stock are expected to remain unchanged.
  8. 8. The firm’s net profit margin is 4%, and it expects to pay out $70,000 in cash dividends during 2020.
  9. 9. The December 31, 2019, balance sheet follows.

Chapter 4, Problem 4.18P, Learning Goal 5 P4-18 Pro forma balance sheet: Basic Leonard Industries wishes to prepare a pro

  1. a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31, 2020, for Leonard Industries.
  2. b. How much, if any, additional financing will Leonard Industries require in 2020? Discuss.
  3. c. Could Leonard Industries adjust its planned 2020 dividend to avoid the situation described in part b? Explain how.
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Chapter 4 Solutions

MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance

Ch. 4.3 - Prob. 4.11RQCh. 4.3 - Prob. 4.12RQCh. 4.3 - What is the cause of uncertainty in the cash...Ch. 4.4 - Prob. 4.14RQCh. 4.5 - Prob. 4.15RQCh. 4.5 - Prob. 4.16RQCh. 4.6 - Prob. 4.17RQCh. 4.6 - What is the significance of the plug figure,...Ch. 4.7 - Prob. 4.19RQCh. 4.7 - Prob. 4.20RQCh. 4 - Opener-in-Review The chapter opener described a...Ch. 4 - Learning Goals 2, 3 ST4-1 Depreciation and cash...Ch. 4 - Prob. 4.2STPCh. 4 - Prob. 4.3STPCh. 4 - Prob. 4.1WUECh. 4 - Prob. 4.2WUECh. 4 - Learning Goal 3 E4-3 Determine the operating cash...Ch. 4 - Prob. 4.4WUECh. 4 - Learning Goal 5 E4-5 Rimier Corp. forecasts sales...Ch. 4 - Prob. 4.1PCh. 4 - Learning Goal 2 P4-2 Depreciation In early 2019,...Ch. 4 - Prob. 4.3PCh. 4 - Learning Goals 2, 3 P4-4 Depreciation and...Ch. 4 - Learning Goal 3 P4-5 Classifying inflows and...Ch. 4 - Prob. 4.6PCh. 4 - Learning Goal 4 P4-8 Cash receipts A firm has...Ch. 4 - Learning Goal 4 P4-9 Cash disbursements schedule...Ch. 4 - Learning Goal 4 P4-10 Cash budget: Basic Grenoble...Ch. 4 - Prob. 4.11PCh. 4 - Learning Goal 4 P4-12 Cash budget: Advanced The...Ch. 4 - Prob. 4.13PCh. 4 - Prob. 4.14PCh. 4 - Learning Goal 4 P4-15 Multiple cash budgets:...Ch. 4 - Learning Goal 5 P4-16 Pro forma income statement...Ch. 4 - Learning Goal 5 P4-17 Pro forma income statement:...Ch. 4 - Learning Goal 5 P4-18 Pro forma balance sheet:...Ch. 4 - Learning Goal 5 P4-19 Pro forma balance sheet...Ch. 4 - Learning Goal 5 P4-20 Integrative: Pro forma...Ch. 4 - Learning Goal 5 P4-21 Integrative: Pro forma...Ch. 4 - Prob. 4.22PCh. 4 - Prob. 1SE
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