= Homework: Homework 2 Question 4, P4-21 (similar to) Part 1 of 4 HW Score: 57.37%, 57.37 of 100 points Points: 7.24 of 35 O Save (5) The firm will pay (9) A new IntegrativePro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet ) and financial projections for use in preparing financial plans for the coming year. Information related to financial projections for next year is as follows: (1) Projected sales are $5,990,000 (2) Cost of goods sold last year includes $991,000 in fixed costs. (3) Operating expense last year includes $259,000 in fixed costs. Data table (4) Interest expense will remain unchanged. cash dividends amounting to 40% of net profits after taxes. (6) Cash and inventories will double. 7 Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. Provincial Imports, Inc. Income Statement (8) Accounts receivable accounts payable, and other current liabilities will change in direct response to the change in sales. for the Year Just Ended new computer system costing S354,000 will be purchased during the year. Total depreciation expense for the year will be $109,000. Sales revenue $5,004.000 (10) The tax rate will remain at 40% Less: Cost of goods sold 2,749,000 a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales method. Gross profits $2,255,000 b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of the retained earnings account. a Less: Operating expenses 857,000 c. Analyze these statements, and discuss the resulting external financing required. Operating profits $1,398,000 Less: Interest expense 205,000 Net profits before taxes $1.193.000 a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales method. Less: Taxes (rate = 40%) 477,200 Complete the pro forma income statement for next year below: (Round to the nearest dollar.) Net profits after taxes $715,800 Less: Cash dividends 286,320 Pro Forma Income Statement To retained earnings $429,480 Provincial Imports, Inc. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) for Next Year Provincial Imports, Inc. Balance Sheet (percent-of-sales method) for the Year Just Ended Assets $ Liabilities and Stockholders' Equity Sales Cash $202,000 Accounts payable $690,000 Less: Cost of goods sold Marketable securities 222,000 Taxes payable 95,000 Gross profits $ Accounts receivable 625.000 Notes payable 193,000 Inventories 509,000 Other current liabilities 5.500 Less: Operating expenses Total current assets $1,558,000 Total current liabilities $983,500 Operating profits S Net fixed assets 1,409,000 Long-term debt 529,500 Less: Interest expense Common stock 75,000 Retained earnings 1,379,000 Net profits before taxes $ Total assets $2.967,000 Total liabilities and equity $2,967,000 Less: Taxes (rate = 40%) Net profits after taxes $ Less: Cash dividends (40%) Print Done Help me solve this View an example Get more help Tel WHICUn answe