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A financial manager at Big Mines Corp has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning
A financial manager at Big Mines Corp has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning purposes for the coming year ended December 31, 2019. Using the percent-of-sales method and the following financial data prepare tite pro forma balance shieet as of Dece31,2019 in order to answer the following multiple choice questions. The firm estimates sales of $1,000,000. B. The firm maintains a cash balance of $25,000 C. Accounts receivable represents 15 percent of sales D. Inventory represents 35 percent of sales E. A new piece of mining equipment costing $150,000 will be purchased in 2019. Total depreciation for 2019 will be $75,000 F. G. There will be no change in notes payable, accruals, and common stock H. The firm plans to retire (pay) a long term note (debt) of $100,000. I. Dividends of $45,000 will be paid in 2019 ccounts payable represents 10 percent of sales. The firm expect a Net Income to be $40,000. Balance Sheet Big Mines Corp December 31, 2018 Assets Cash Accounts receivable Inventories S 25,000 120,000 300,000 S 445,000 $500,000 Total current assets Net fixed assets Total assets S 945,000 Liabilities and stockholders' equity $ 80,000 Accounts payable Notes payable Accruals 350,000 50,000 480,000 Total current liabilities Long-term debts 150,000 S 630,000 $ 180,000 Total liabilities Stockholders' equity Common stock 135,000 Retained earnings Total Stockholders' equity Total liabilities and stockholders' equity S 315,000 945,000
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