(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Red Queen Restaurants Income Statement for the Year Ended December 31, 2019 Sales revenue $799,300 Less: Cost of goods sold 599,600 Gross profits $199,700 Less: Operating expenses 100,000 Net profits before taxes $99,700 Less: Taxes (rate = 40%) 39,880 Net profits after taxes $59,820 Less: Cash dividends 20,600 To retained earnings $39,220 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $32,300 Accounts payable $99,100 Marketable securities 17,900 Taxes payable 19,500 Accounts receivable 149,700 Other current liabilities 4,100 Inventories 99,800 Total current liabilities $122,700 Total current assets $299,700 Long-term debt $200,500 Net fixed assets 349,400 Common stock $150,900 Retained earnings $175,000 Total assets $649,100 Total liabilities and equity $649,100 Integrative-Pro forma statements Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for 2020 will be $899,200. (2) The firm expects to pay $34,900 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $31,200. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $43,900 will be purchased in 2020. Total depreciation for 2020 will be $15,000. (7) Accounts payable will change directly in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement. (9) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round to the nearest dollar. Round the percentage of sales to four decimal places.) Pro Forma Income Statement Red Queen Restaurants for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ Less: Cost of goods sold $ % IntegrativePro forma statements Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here E to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for 2020 will be $899,200. (2) The firm expects to pay $34,900 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $31,200. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $43,900 will be purchased in 2020. Total depreciation for 2020 will be $15,000. (7) Accounts payable will change directly in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement (9) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. Sales $ $ % $ $ % Less: Cost of goods sold Gross profits Less: Operating expenses Net profits before taxes Less: Taxes (rate = 40%) Net profits after taxes Less: Cash dividends $ $ $ $ To Retained earnings $
