Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $49,000 Cost 40,300 Taxable income Taxes (22%) $ 8,700

image text in transcribed
image text in transcribed
Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $49,000 Cost 40,300 Taxable income Taxes (22%) $ 8,700 1,914 7 Net income $ 6,786 Dividends Addition to retained earnings $2,400 4,386 The balance sheet for the Heir Jordan Corporation follows, HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 2.950 Accounts payable $ 2,400 Accounts receivable 4,100 Notes payable 5.400 Inventory 6,400 Total $ 7,800 Total $ 13,450 Long-term debt $28,000 Fixed assets Owners' equity Common stock and paid in surplus Retained earnings $ 15.000 Net plant and equipment $ 41,300 3,950 Total $ 18,950 Total assets $54750 Total liabilities and owners equity $ 54,750 Prepare a pro forma balance sheet, assuming a sales increase of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Assets $ Current assets Cash Accounts receivable Inventory Total 64.00 HEIR JORDAN CORPORATION Pro Forma Balance Sheet Liabilities and Owners' Equity Current liabilities 2,950.00 Accounts payable 4,100.00 Notes payable 6,400.00 Total 13,450.00 Long-term debt Owners' equity Common stock and paid in surplus Retained earnings Total Total liabilities and owners' equity $ Fixed assets Net plant and equipment Total assets Calculate the EFN. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) EFN

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Econometrics Modeling Market Microstructure Factor Models And Financial Risk Measures

Authors: G. Gregoriou , Razvan Pascalau

1st Edition

0230283624, 0230298109, 9780230283626, 9780230298101

More Books

Students also viewed these Finance questions