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Income Statement                                       &nbsp

Income Statement                                                              Balance Sheet

                             Year Ended 2017                                                                12/31/17

            Sales                                               $27,000                Cash                                                    $   500

            Cost of Goods Sold                          18,900                Accounts Receivable                             4,500

            Gross Profit                                        8,100                Inventory                                              3,150

            Expenses                                            6,000                Gross Fixed Assets                 54,000

            Earnings Before Tax                          2,100                Accumulated Depreciation      21,600

            Tax (.5)                                              1,050                Net Fixed Assets                                32,400

            Net Income                                     $  1,050               Total Assets                                      $40,550

                                                                                                Accounts Payable                               $ 1,575

                                                                                                Notes Payable                                    19,175

                                                                                                Accrued Tax                                             263

                                                                                                Common Stock                                   15,787

                                                                                                Retained Earnings                                  3,750

                                                                                                Total Debt & Equity                          $40,550

Based on the 2017 Financial Statements above, compute Pro Forma’s for 2018 using the percent of sales method using the following assumptions:

20% growth rate in sales, and

15% dividend payout

Business   Finance   
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Answer #1
Income Statement
Sales 32400
Less COGS 22680
Gross Profit 9720
Expenses 7200
EBT 2520
Less Taxes 1260
Net Income 1260
Less: Dividend 189
Income transferred to RE 1071
Balance Sheet
Accounts payable 1890 Cash 600
Notes payable 19175 Accounts receivable 5400
Accrued tax 263 Inventory 3780
Common stock 15787 Net fixed assets 38880
Retained earnings 4821
Debt( balancing figure) 6724
TOTAL 48660 Total assets 48660

WORKINGS

(In balance sheet following assets change with sales:

Cash
Accounts receivable
Inventory

Net fixed assets and

Accounts payable.

Debt is the balancing figure.

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