Continuing problem 8, Pepperton's annual income statement and balance sheet for December 31, 2008 appear below. Additional in- formation about the company's accounting methods and the trea- surer's expectations for the first quarter of 2009 appear in the footnotes.

a. Use this information and the information in problem 8 to con- struct a pro forma income statement for the first quarter of 2009 and a pro forma balance sheet for March 31, 2009. What is your es- timated external financing need for March 31?

b. Does the March 31, 2009, estimated external financing equal your cash surplus (deficit) for this date from your cash budget in prob- lem 8? Should it?

c. Do your pro forma forecasts tell you more than your cash budget does about Pepperton's financial prospects?

d. What do your pro forma income statement and balance sheet tell you about Pepperton's need for external financing on February 28, 2009?AppendixLO1

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Annual Income Statement December 31, 2008 ($ thousands) Net sales $6,000 Cost of goods sold 3,900 Gross profits 2,100 Selling and administrative expenses 1,620 Interest expense Depreciation Net profit before tax Tax (33%) Net profit after tax 90 90 300 99 $ 201 Assets Cash Accounts receivable inventory Balance Sheet December 31, 2008 ($ thousands) Total current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets Liabilities Bank loan Accounts payable Miscellaneous accruals Current portion long-term debt Taxes payable Total current liabilities Long-term debt Shareholders' equity Total liabilities and equity $ 300 960 1,800 3,060 900 150 750 $3,810 $ 0 1,740 60 210 300 2,310 990 510 $3,810