.. IntegrativePro forma statements Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for 2020 will be $899,400. (2) The firm expects to pay $34,400 in cash dividends in 2020. - X (3) The firm wishes to maintain a minimum cash balance of $30,500. Data table (4) Accounts receivable represent approximately 18% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $43,300 will be purchased in 2020. Total depreciation for 2020 will be $16,700. (7) Accounts payable will change directly in response to changes in sales in 2020. (Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement spreadsheet.) (9) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. Red Queen Restaurants Income Statement b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. for the Year Ended December 31, 2019 c. Analyze these statements, and discuss the resulting external financing required. Sales revenue $799,400 Less: Cost of goods sold 600,100 Gross profits $199,300 Less: Operating expenses 99,700 a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. Net profits before taxes $99,600 Less: Taxes (rate = 21%) Complete the pro forma income statement for the year ended December 31, 2020 below: (Round to the nearest dollar. Round the percentage of sales to four decimal places.) : 20.916 Net profits after taxes $78,684 Pro Forma Income Statement Less: Cash dividends 19,700 To retained earnings $58,984 $ Red Queen Restaurants for the Year Ended December 31, 2020 Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity (percent-of-sales method) Cash $31,900 Accounts payable $101,000 Sales $ Marketable securities 18,300 Taxes payable 19,500 Accounts receivable 150.500 $ Other current liabilities 5,000 Less: Cost of goods sold % Inventories 100,700 Total current liabilities $125,500 Gross profits $ Total current assets $301,400 Long-term debt $200,300 Less: Operating expenses : S % Net fixed assets 349,800 Common stock $150.400 Retained earnings $175,000 Net profits before taxes $ Total assets $651,200 Total liabilities and equity 5651,200 Less: Taxes (rate = 21%) $ Net profits after taxes $ Less: Cash dividends $ Print Done To Retained earnings $
