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Can anyone help me with solving this problem? Problem 4-25 Capacity Usage and Growth [LO2] - Do not sell fixed assets The most recent financial
Can anyone help me with solving this problem?
Problem 4-25 Capacity Usage and Growth [LO2] - Do not sell fixed assets The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. In 2020, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ Pro Forma Income Statement } \\ \hline Sales & \\ \hline Costs & \\ \hline Other expenses & \\ \hline EBIT & \\ \hline Interest & \\ \hline Taxable income & \\ \hline Taxes (25\%) & \\ \hline Net income & \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline \multicolumn{2}{|c|}{ Pro Forma Balance Sheet } \\ \hline Assets & Liabilities and Owners' Equity \\ \hline Current assets & Current liabilities \\ \hline Cash & Accounts payable \\ \hline Accounts receivable & Notes payable \\ \hline Inventory & Total current liabilities \\ \hline \multirow[t]{2}{*}{ Total current assets } & Long-term debt \\ \hline & Owners' equity \\ \hline Fixed assets & Common stock and paid-in surplus \\ \hline \multirow[t]{2}{*}{ Net plant and equipment } & Retained earnings \\ \hline & Total owner's equity \\ \hline Total assets & Total liabilities and owners' equity \\ \hline \end{tabular}Step by Step Solution
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