1.

Use the following financial statements and financial data to create a pro forma

income statement and balance sheet for Bo Knows Profit Corporation. Please

determine if they will need additional funding or if they will have excess funding.

Bo Knows Profit Corporation

Income Statement for Year Ending 2011

Sales

$8,800

Less: Costs

5.000

Depreciation

900

EBIT

2.900

Less: Interest

350

2.550

EBT

850

Taxes

$1.700

Net income.

Cash

Accounts

Receivable

Inventory

Current Assets

Fixed Assets

Total Assets

Bo Knows Profit Corporation

Balance Sheets for End of Years 2010. 2011

2011

2010

2011

2010

110

170 Accounts Payable

120

135

700

500 Notes Payable

1,400

1,200

1.000

1,240 Current Liabilities 1,520 1.335

1.810

1,910 Long-term Debt

3,500

2.000 Common Stock

2.620

2.005

200

100

(50 shares)

Retained Earnings

970

470

5.310

3,910 Total Liab. &

Equity

5,310

3,910

Fixed Assets

Total Assets

3,500 2,000 Common Stock

(50 shares)

Retained Earnings

5,310 3,910 Total Liab. &

Equity

200

100

970

470

5,310

3.910

Financial Data:

1)

Assume that sales will grow by 20%.

2)

Accounts Receivable will represent 15% of sales.

3)

Inventory is expected to be 20% of sales.

4)

Bo Knows will purchase $500 in fixed assets and book $640 in depreciation.

5)

All other spontaneous accounts will grow in proportion to sales.

Dividend is expected to remain constant. (Hint: you can find current dividend

6)

from historical data)

Question 3 (1 point)

2. Given above Income Statement and Balance Sheet for Bo Know only, forecast Bo

Knows's 1st Pass additional funds needed (AFN) for the coming year.

1)674

2)993

3)607

4)1,168

5)975

Question 4 (1 point)

4. Find the projected addtion to Retained Earning of the second pass.

1)989

2)1,011

3)1,141

4)644

5)661