For questions 1 to 7, please use the following projections for Top-A1 Inc.: Total sales of $150,000 Cost of goods sold equal to 76 percent of sales Total expenses equal to 14 percent of sales Tax rate of 35 percent Beginning equity of $50,000 Beginning inventory of $12,000 Age of ending inventory of 60 days Minimum cash balance of $10,000 Accounts receivable of 30 days Fixed assets of $60,000 Accounts payable of 35 days 1. Calculate the projected gross profit for Top-A1. 2. Calculate the projected purchases for Top-A1. 3. Create an entire pro forma income statement for Top-A1. Be sure to calculate the projected net earnings. 4. Assume Top-A1 has a dividend payout of 40 percent. Calculate the projected change in retained earnings for Top-A1. 5. Calculate the projected accounts receivable for Top-Al. 6. Calculate the projected accounts payable for Top-Al. 7. Create a pro forma balance sheet. Calculate the long-term debt as the balancing amount. 8. What would be the impact on Top-Al's pro forma net earnings if sales were to change to $200,000? 9. What would be the impact on Top-Al's pro forma long-term debt if sales were to change to $200,000 and the age of payables were to change to 45 days? 10. Now, assume Top-Al's sales in the subsequent year increase by 15 percent. If all the other relationships remain the same, what will be the pro forma net earnings in two years? 11. Again, assume Top-Al's sales in the subsequent year increase by 15 percent. If all the other relationships remain the same, what will be the pro forma loan requirement in two years? US For questions 1 to 7, please use the following projections for Top-A1 Inc.: Total sales of $150,000 Cost of goods sold equal to 76 percent of sales Total expenses equal to 14 percent of sales Tax rate of 35 percent Beginning equity of $50,000 Beginning inventory of $12,000 Age of ending inventory of 60 days Minimum cash balance of $10,000 Accounts receivable of 30 days Fixed assets of $60,000 Accounts payable of 35 days 1. Calculate the projected gross profit for Top-A1. 2. Calculate the projected purchases for Top-A1. 3. Create an entire pro forma income statement for Top-A1. Be sure to calculate the projected net earnings. 4. Assume Top-A1 has a dividend payout of 40 percent. Calculate the projected change in retained earnings for Top-A1. 5. Calculate the projected accounts receivable for Top-Al. 6. Calculate the projected accounts payable for Top-Al. 7. Create a pro forma balance sheet. Calculate the long-term debt as the balancing amount. 8. What would be the impact on Top-Al's pro forma net earnings if sales were to change to $200,000? 9. What would be the impact on Top-Al's pro forma long-term debt if sales were to change to $200,000 and the age of payables were to change to 45 days? 10. Now, assume Top-Al's sales in the subsequent year increase by 15 percent. If all the other relationships remain the same, what will be the pro forma net earnings in two years? 11. Again, assume Top-Al's sales in the subsequent year increase by 15 percent. If all the other relationships remain the same, what will be the pro forma loan requirement in two years? US
