Information related to financial projections for next year is as follows: (1) Projected sales are 55,996,000 (2) Cost of goods sold last year includes $993 000 in foxed costs (3) Operating expense last year includes $256,000 in foed costs (4) Interest expense will remain unchanged. (5) The firm will pay 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. (8) Accounts receivable accounts payable, and other current liabilities will change in direct response to the change in sales (9) A new computer system costing 5352,000 will be purchased during the year Total depreciation expense for the year will be 5103,000 (10) The tax rate will remain at 40% a. Prepare a proforma income statement for next year, using the forced cost data given to improve the accuracy of the percent-of-sales method. 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 C. Analyze these statements, and discuss the resulting external financing required. Cash 5 Marketable securities Accounts receivable Inventones Total current assets $ Net foyed assets Total assets Complete the liabilities and equity part of the proforma balance sheet for next year. (Round to the nearest dollat) Pro Forma Balance Sheet Provincial Imports, Inc. for Next Year (Judgmental Method) Accounts payable Taxes payable Notes payable Other current abilities Total current liabilities Long-term debt Common stock Retained earnings External funds required Total abilities and stockholders equity 5 c. Using the judgmental approach, the external tunds requirement is $(Round to the nearest dollar) Information related to financial projections for next year is as follows (1) Projected sales are $5.996,000 (2) Cost of goods sold last year includes 5993.000 in fixed costs. (3) Operating expense last year includes $256.000 in fixed costs (4) Interest expense will remain unchanged. (5) The firm will pay 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. (8) Accounts receivable, accounts payable and other current liabilities will change in direct response to the change in sales (9) A new computer system costing $352,000 will be purchased during the year Total depreciation expense for the year will be $103,000 (10) The tax rate will remain at 40%. 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 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 C. Analyze these statements, and discuss the resulting external financing required. Pro Forma Balance Sheet Provincial Imports, Inc. for Next Year (Judgmental Method) Cash Marketable securities Accounts receivable inventores Total current asseto Not fixed assets Total assets Complete the liabilities and equity part of the pro forma balance sheet for next year. (Round to the nearest dollar) Pro Forma Balance Sheet Provincial Imports, Inc. for Next Year (Judgmental Method) Accounts payable Taxes payable Notes payable Other current liabilities Total current liabilities Long-term debt Common stock Retained earnings Cast and Sustails 20
