Income Statement for the year ending December 31, 2014 Balance Sheet December 31, 2014 (In thousands) in thousands) Sales COGS $20,000 9,100 10,900 Assets: Total Current Assets Net Plant & Equipment Total Assets $50,000 35.000 $85.000 Selling Expenses Depreciation Expense Fixed Expenses 2,000 1,500 2,000 Liabilities & Equity: Accounts Payable Notes Payable Accrued Expenses $20,000 5,000 5,000 EBIT Taxes (40%) 5,400 2,160 Net Income 3,240 Bonds Payable Common Stock Capital in Excess of Par Retained Earnings 20,000 20,000 10,000 5,000 Common Stock Div. 600 $ 2,640 Total Liabilities & Equity $85.000 Sales for 2015 are projected to be $25,000; the firm currently uses straight-line depreciation; No new equipment purchases are planned for 2015; there will be a 100% earnings distribution for 2015. The current assets accounts payable and accrued expenses vary at a constant percent of sales as do COGS and selling expenses. Assume that notes payable is paid off in 2015. 6-1. Retained Earnings for 2015 are projected to be: a. $9,575 b. $5,000 c. $8,825 d. $4,575 6-2 Operating Income for 2015 is projected to be: a. $7,625 b. $6,750 c. $7,125 d. $4,575 6-3 Forecasted total assets for the end of 2015 are: a. $106,250 b. $ 97,500 c. $ 96,000 d. $ 85,000 Forecasted additional funds needed are: a. $9,750 b. ($1,500) c. 0 d. $1,675 Income Statement for the year ending December 31, 2014 Balance Sheet December 31, 2014 (In thousands) in thousands) Sales COGS $20,000 9,100 10,900 Assets: Total Current Assets Net Plant & Equipment Total Assets $50,000 35.000 $85.000 Selling Expenses Depreciation Expense Fixed Expenses 2,000 1,500 2,000 Liabilities & Equity: Accounts Payable Notes Payable Accrued Expenses $20,000 5,000 5,000 EBIT Taxes (40%) 5,400 2,160 Net Income 3,240 Bonds Payable Common Stock Capital in Excess of Par Retained Earnings 20,000 20,000 10,000 5,000 Common Stock Div. 600 $ 2,640 Total Liabilities & Equity $85.000 Sales for 2015 are projected to be $25,000; the firm currently uses straight-line depreciation; No new equipment purchases are planned for 2015; there will be a 100% earnings distribution for 2015. The current assets accounts payable and accrued expenses vary at a constant percent of sales as do COGS and selling expenses. Assume that notes payable is paid off in 2015. 6-1. Retained Earnings for 2015 are projected to be: a. $9,575 b. $5,000 c. $8,825 d. $4,575 6-2 Operating Income for 2015 is projected to be: a. $7,625 b. $6,750 c. $7,125 d. $4,575 6-3 Forecasted total assets for the end of 2015 are: a. $106,250 b. $ 97,500 c. $ 96,000 d. $ 85,000 Forecasted additional funds needed are: a. $9,750 b. ($1,500) c. 0 d. $1,675