Presented below is the consolidated statement of earnings for Mann & Miller, Inc. Required Using the Mann
Question:
Presented below is the consolidated statement of earnings for Mann & Miller, Inc.
Required
Using the Mann & Miller Inc. (M&M) consolidated statement of earnings as your base year, prepare pro forma income statements for M&M for 2016 and 2017 using an Excel spreadsheet. Relevant assumptions that you should use include:
1. Sales growth is 10 percent per year.
2. Gross profit margin is 65 percent.
3. Effective income tax rate is 29 percent.
4. Selling, marketing & administrative expenses, research expenses, and other income and expenses net all vary as a function of sales.
5. Purchased in-process R&D, and interest income remain constant at the 2015 level.
6. Interest expense is six percent of the beginning balance of long-term debt.
7. Long-term debt at the end of 2015 is \($2,750\) and increases by five percent each year.
Step by Step Answer:
Financial Accounting For Executives And MBAs
ISBN: 9781618531988
4th Edition
Authors: Wallace, Simko, Ferris