Integrative-Pro 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 $899,800. (2) The firm expects to pay $34,500 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $30,700. (4) Accounts receivable represent approximately 22% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $42,100 will be purchased in 2020. Total depreciation for 2020 will be $15,700. (7) Accounts payable will change directly in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement. (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. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. c. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. 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.) Pro Forma Income Statement Red Queen Restaurants for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ $ $ Less: Cost of goods sold Gross profits Less: Operating expenses Net profits before taxes $ % $ $ Less: Taxes (rate = 40%) Net profits after taxes $ IIII Less: Cash dividends $ To Retained earnings $ A Pro Forma Balance Sheet Red Queen Restaurants for the Year Ended December 31, 2020 (Judgmental Method) Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets $ $ $ Total assets A Red Queen Restaurants Income Statement for the Year Ended December 31, 2019 Sales revenue $800,600 Less: Cost of goods sold 599,200 Gross profits $ 201,400 Less: Operating expenses 100,500 Net profits before taxes $100,900 Less: Taxes (rate = 40%) 40,360 Net profits after taxes $60,540 Less: Cash dividends 20,300 To retained earnings $40,240 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $32,900 Accounts payable $100,200 Marketable securities 17,100 Taxes payable 20,400 Accounts receivable 149,800 Other current liabilities 5,000 Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $32,900 Accounts payable $100,200 Marketable securities 17,100 Taxes payable 20,400 Accounts receivable 149,800 Other current liabilities 5,000 Inventories 100,500 Total current liabilities $125,600 Total current assets $300,300 Long-term debt $200,500 Net fixed assets 350,800 Common stock $150,000 Retained earnings $175,000 Total assets $651,100 Total liabilities and equity $651,100 Integrative-Pro 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 $899,800. (2) The firm expects to pay $34,500 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $30,700. (4) Accounts receivable represent approximately 22% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $42,100 will be purchased in 2020. Total depreciation for 2020 will be $15,700. (7) Accounts payable will change directly in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement. (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. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. c. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. 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.) Pro Forma Income Statement Red Queen Restaurants for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ $ $ Less: Cost of goods sold Gross profits Less: Operating expenses Net profits before taxes $ % $ $ Less: Taxes (rate = 40%) Net profits after taxes $ IIII Less: Cash dividends $ To Retained earnings $ A Pro Forma Balance Sheet Red Queen Restaurants for the Year Ended December 31, 2020 (Judgmental Method) Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets $ $ $ Total assets A Red Queen Restaurants Income Statement for the Year Ended December 31, 2019 Sales revenue $800,600 Less: Cost of goods sold 599,200 Gross profits $ 201,400 Less: Operating expenses 100,500 Net profits before taxes $100,900 Less: Taxes (rate = 40%) 40,360 Net profits after taxes $60,540 Less: Cash dividends 20,300 To retained earnings $40,240 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $32,900 Accounts payable $100,200 Marketable securities 17,100 Taxes payable 20,400 Accounts receivable 149,800 Other current liabilities 5,000 Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $32,900 Accounts payable $100,200 Marketable securities 17,100 Taxes payable 20,400 Accounts receivable 149,800 Other current liabilities 5,000 Inventories 100,500 Total current liabilities $125,600 Total current assets $300,300 Long-term debt $200,500 Net fixed assets 350,800 Common stock $150,000 Retained earnings $175,000 Total assets $651,100 Total liabilities and equity $651,100