a. Use the historical and projected financial data provided to prepare a pro forma income statement for the year ended December 31, 2013. (Hint: Use the percent-of-sales method to estimate all values except depreciation expense and interest expense, which have been estimated by management and included in the table.) Complete the pro forma income statement for the year ended December 31, 2013 below. (Round the dollar amounts to the nearest dollar. Round the percentages of sale to four decimal places. NOTE: Make sure you use the rounded amounts to performed the proceeding calculations.) Martin Manufacturing Company i Data Table Pro Forma Income Statement for the Year Ended December 31, 2013 Sales revenue S 100.0 % Martin Manufacturing Company Key Projected Financial Data (2013) Data item Value Less: Cost of goods sold Sales revenue $8.500.000 Gross profits S Minimum cash balance $25.000 Less: Operating expenses Inventory turnover (times) 7.0 Selling expense and general and administrative expense 50 days s 96 Average collection period Fixed-asset purchases $400.000 Depreciation expense Total dividend payments (preferred and common) $20.000 Total operating expenses S Depreciation expense $185.000 Interest expense $97.000 Operating profits S Accounts payable increase 2096 Data Table Less: Interest expense Accruals and long-term debt Unchanged Net profits before taxes S Notes payable, preferred and common stock Unchanged Less: Taxes (40%) : Martin Manufacturing Company Key Projected Financial Data (2013) S Total profits after taxes Print Done Data item Value Sales revenue $6,500,000 Minimum cash balance $25.000 Martin Manufacturing Company Key Projected Financial Data (2013) Inventory turnover (times) 7.0 Data item Value Average collection period 50 days Sales revenue $8.500.000 Fixed-asset purchases $400.000 Minimum cash balance $25.000 Total dividend payments (preferred and common) $20,000 Inventory turnover (times) 7.0 Depreciation expense $185,000 Average collection period 50 days Interest expense $97.000 Fixed-asset purchases $400,000 Accounts payable increase 20% Total dividend payments (preferred and common) $20.000 Accruals and long-term debt Unchanged Depreciation expense $185.000 Notes payable, preferred and common stock Unchanged Enter any number in the edit fields and then click Check Answer. . Interest expense $97.000 Accounts payable increase 20% Print 3 parts Accruals and long-term debt Unchanged Done remaining Notes payable preferred and common stock Unchanged a. Use the historical and projected financial data provided to prepare a pro forma income statement for the year ended December 31, 2013. (Hint: Use the percent-of-sales method to estimate all values except depreciation expense and interest expense, which have been estimated by management and included in the table.) Complete the pro forma income statement for the year ended December 31, 2013 below. (Round the dollar amounts to the nearest dollar. Round the percentages of sale to four decimal places. NOTE: Make sure you use the rounded amounts to performed the proceeding calculations.) Martin Manufacturing Company i Data Table Pro Forma Income Statement for the Year Ended December 31, 2013 Sales revenue S 100.0 % Martin Manufacturing Company Key Projected Financial Data (2013) Data item Value Less: Cost of goods sold Sales revenue $8.500.000 Gross profits S Minimum cash balance $25.000 Less: Operating expenses Inventory turnover (times) 7.0 Selling expense and general and administrative expense 50 days s 96 Average collection period Fixed-asset purchases $400.000 Depreciation expense Total dividend payments (preferred and common) $20.000 Total operating expenses S Depreciation expense $185.000 Interest expense $97.000 Operating profits S Accounts payable increase 2096 Data Table Less: Interest expense Accruals and long-term debt Unchanged Net profits before taxes S Notes payable, preferred and common stock Unchanged Less: Taxes (40%) : Martin Manufacturing Company Key Projected Financial Data (2013) S Total profits after taxes Print Done Data item Value Sales revenue $6,500,000 Minimum cash balance $25.000 Martin Manufacturing Company Key Projected Financial Data (2013) Inventory turnover (times) 7.0 Data item Value Average collection period 50 days Sales revenue $8.500.000 Fixed-asset purchases $400.000 Minimum cash balance $25.000 Total dividend payments (preferred and common) $20,000 Inventory turnover (times) 7.0 Depreciation expense $185,000 Average collection period 50 days Interest expense $97.000 Fixed-asset purchases $400,000 Accounts payable increase 20% Total dividend payments (preferred and common) $20.000 Accruals and long-term debt Unchanged Depreciation expense $185.000 Notes payable, preferred and common stock Unchanged Enter any number in the edit fields and then click Check Answer. . Interest expense $97.000 Accounts payable increase 20% Print 3 parts Accruals and long-term debt Unchanged Done remaining Notes payable preferred and common stock Unchanged
