11. Continuing problem 10, Westmark Industrial's annual income statement and balance sheet for December 31, 2017, are shown next. additional information about the company's accounting methods and the treasurer's expectations for the first quarter of 2018 appear in the footnotes.
a. Use this information and the information in problem 10 to construct a pro forma income statement for the first quarter of 2018 and a pro forma balance sheet for March 31, 2018. what is your estimated external financing need for March 31?
b. does the march 31, 2018 estimated external financing equal your cash surplus (deficit) for this date from your cash budget in problem 10? should it?
c. Do your pro forma forecasts tell you more than your cash budget does about Westmark's financial prospects? d. what do your pro forma income statement and balance sheet tell you about Westmarks need for external financing on February 28, 2018?
12. Based on your answer to question 11, construct a first-quarter 2018 cash flow forecast to Westmark Industrial.
WOLTERMINUSKRIIe Salement And DALAN SOR U arter of het. Additional information about the company's accounting methods and the treasurer's expectations for the first qu 2018 appear in the footnotes. SOLO 3.900 2.100 Income Statement anuary 1, 2017 to December 31, 2017 (s thousands Net Cost of goods sold Gross profits Selling and administrative expensesi Interest expens Depreciation Net profit before tak Tax (330) Net profit after tas 1.620 218 818 tuber 31, 2017 5 thousands ste 90 SA 3060 Falat sunt assets fire Accumulated deprecat Font Paragraph Styles 10. The treasurer of Westmark Industrial, Inc., a wholesale distributor of household appliances, wants to estimate his Page 106 company's cash balances for the first three months of 2018. Using the following information, construct a monthly cash budget for Westmark for January through March 2018. Westmark's sales are 20 percent for cash, with the rest on 30-day credit terms. Its purchases are all on 60-day credit terms. Does it appear from your results that the treasurer should be concerned about investing excess cash or looking for a bank loan? 2018 (Projected) February 240 420 March 240 120 120 Sales Purchases 1.20 Westmark Industrial, Inc. Selected Information (S thousands) 2017 (Actual) October November December January 360 1.200 600 510 540 300 Wages payable monthly Principal payment on debt due in March Interest due in March Dividend payable in March Taxes payable in February Addition to accumulated depreciation in March Cash balance on January 1. 2018 Minimum desired cash balance 180 210 90 30 300 2012 Industrial's annual income statement and balance sheet for December WOLTERMINUSKRIIe Salement And DALAN SOR U arter of het. Additional information about the company's accounting methods and the treasurer's expectations for the first qu 2018 appear in the footnotes. SOLO 3.900 2.100 Income Statement anuary 1, 2017 to December 31, 2017 (s thousands Net Cost of goods sold Gross profits Selling and administrative expensesi Interest expens Depreciation Net profit before tak Tax (330) Net profit after tas 1.620 218 818 tuber 31, 2017 5 thousands ste 90 SA 3060 Falat sunt assets fire Accumulated deprecat Font Paragraph Styles 10. The treasurer of Westmark Industrial, Inc., a wholesale distributor of household appliances, wants to estimate his Page 106 company's cash balances for the first three months of 2018. Using the following information, construct a monthly cash budget for Westmark for January through March 2018. Westmark's sales are 20 percent for cash, with the rest on 30-day credit terms. Its purchases are all on 60-day credit terms. Does it appear from your results that the treasurer should be concerned about investing excess cash or looking for a bank loan? 2018 (Projected) February 240 420 March 240 120 120 Sales Purchases 1.20 Westmark Industrial, Inc. Selected Information (S thousands) 2017 (Actual) October November December January 360 1.200 600 510 540 300 Wages payable monthly Principal payment on debt due in March Interest due in March Dividend payable in March Taxes payable in February Addition to accumulated depreciation in March Cash balance on January 1. 2018 Minimum desired cash balance 180 210 90 30 300 2012 Industrial's annual income statement and balance sheet for December
