Question
12. Pro forma balance sheet. California Cement Company Balance Sheet for the Year Ending 2013 Current Assets Cash $1,447,000 Marketable Securities 1,129,000 Accounts Receivable 3,769,000
12. Pro forma balance sheet.
California Cement Company
Balance Sheet for the Year Ending 2013
Current Assets
Cash $1,447,000
Marketable Securities 1,129,000
Accounts Receivable 3,769,000
Inventories 2,601,000
Total Current Assets $ 8,946,000
Long-term Assets
Plant, Property & Equip. $ 6,760,000
Goodwill 4,082,000
Intangible Assets 1,506,000
Total Long-term Assets $12,348,000
TOTAL ASSETS $21,294,000
Current Liabilities
Accounts Payable $ 6,125,000
Other Current Liabilities $ 1,198,000
Total Current Liabilities $ 7,323,000
Long-term Liabilities
Long-Term Debt $ 2,488,000
Other Long-term Liab. $ 1,524,000
Total Long-Term Liabilities $ 4,012,000
TOTAL LIABILITIES $11,335,000
Owners Equity
Common Stock $ 2,493,000
Retained Earnings $ 7,466,000
TOTAL OWNERS EQUITY $ 9,959,000
TOTAL LIABILITIES & OWNERS EQUITY $21,294,000
Next year, California Cement Company will increase its Plant, Property, and Equipment (PPE) by $6,000,000 with a plant expansion. The inventories will grow by 80%, accounts receivable will grow by 70%, and marketable securities will be reduced by 60% to help finance the expansion. If all other asset accounts remain the same and long-term debt will be used to finance the remaining costs of the expansion (no change in common stock or retained earnings), prepare a pro forma balance sheet for 2014. How much additional debt will be estimated using this pro forma balance sheet?
See Template on the Next page
| California Cement Company Pro Forma Balance Sheet for the Year Ending 2014 | ||
| Current Assets |
|
|
| Cash | $1,447,000 |
|
| Marketable Securities | 1,129,000 * .40 |
|
| Accounts Receivable | 3,769,000 * 1.70 |
|
| Inventories | 2,601,000 * 1.80 |
|
| Total Current Assets |
| * |
| Long-Term Assets |
|
|
| Plant, Property, & Equip. | $12,760,000 |
|
| Goodwill |
|
|
| Intangible Assets |
|
|
| Total Long-Term Assets |
| * |
| Total Assets |
| * |
| Current Liabilities |
|
|
| Accounts Payable |
|
|
| Other Current Liabilities |
|
|
| Total Current Liabilities |
| * |
| Long-Term Liabilities |
|
|
| Long-Term Debt |
|
|
| Other Long-Term Liab. | $1,524,000 |
|
| Total Long-Term Liabilities |
| * |
| Total Liabilities |
|
|
| Owners Equity |
|
|
| Common Stock |
|
|
| Retained Earnings |
|
|
| Total Owners Equity |
| * |
| Total Liabilities & Owners Equity | * | |
|
Change in long-term debt: $ - $2,488,000 = $ | ||
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International Fraud Handbook
Authors: Joseph T. Wells
1st Edition
1118728505, 9781118728505
