A pro forma Income Statement for Monroe Products Co. is displayed below: Monroe Products Company Income Statements, 2019 and Pro Forma 2020 Years Ended December 31st 2019 Actual 2020 Forecast Net Sales $ 1,000,000 $1,250,000 Cost of Goods Sold 800,000 1,000,000 Gross Profit $ 200,000 $ 250,000 Operating Expenses Depreciation Expense Operating Income (EBIT) 100,000 50,000 50,000 $ 125,000 62,500 62,500 $ Interest Expense Taxable Income 10,000 40,000 $ 12,500 50,000 $ Income Tax Expense 15,000 18,750 Net Income $ 25,000 $ 31,250 Use the information given to construct the Pro Forma Balance Sheet for 2020. a) Sales growth is projected to be 25% in 2020, and Current Assets is expected to grow with Sales. What should Current Assets be in 2020? b) Monroe Products plans to purchase $100,000 of fixed assets in 2020, but will not dispose of any existing fixed assets. What should be its forecast for ending Net Fixed Assets in 2020? c) If Monroe Products pays out 40% of its Net Income in 2020 (payout ratio) and will neither sell nor repurchase equity during the year, what should its forecast for owner's equity be at the end of 2020? d) Given all the above information, What is Monroe Products' projected external funding required for 2020? A pro forma Income Statement for Monroe Products Co. is displayed below: Monroe Products Company Income Statements, 2019 and Pro Forma 2020 Years Ended December 31st 2019 Actual 2020 Forecast Net Sales $ 1,000,000 $1,250,000 Cost of Goods Sold 800,000 1,000,000 Gross Profit $ 200,000 $ 250,000 Operating Expenses Depreciation Expense Operating Income (EBIT) 100,000 50,000 50,000 $ 125,000 62,500 62,500 $ Interest Expense Taxable Income 10,000 40,000 $ 12,500 50,000 $ Income Tax Expense 15,000 18,750 Net Income $ 25,000 $ 31,250 Use the information given to construct the Pro Forma Balance Sheet for 2020. a) Sales growth is projected to be 25% in 2020, and Current Assets is expected to grow with Sales. What should Current Assets be in 2020? b) Monroe Products plans to purchase $100,000 of fixed assets in 2020, but will not dispose of any existing fixed assets. What should be its forecast for ending Net Fixed Assets in 2020? c) If Monroe Products pays out 40% of its Net Income in 2020 (payout ratio) and will neither sell nor repurchase equity during the year, what should its forecast for owner's equity be at the end of 2020? d) Given all the above information, What is Monroe Products' projected external funding required for 2020
