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 for next year: (1) The firm has estimated that its sales will be $899.100. (2) The firm expects to pay $34.500 in cash dividends. (3) The firm wishes to maintain a minimum cash balance of $31,600. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm's ending inventory will change directly with changes in sales. (6) Red Queen will purchase new machine costing $42.700 and have total depreciation of $15,800. (7) Accounts payable will change directly in response to changes in sales. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement (0) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for next year, using the percent-of-sales method. b. Prepare a pro forma balance sheet for next year, using the judgmental approach. c. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for next year, using the percent-of-sales method. Complete the pro forma income statement for next year below: (Round to the nearest dollar. Round the percentage of sales to four decimal places.) Pro Forma Income Statement Red Queen Restaurants (percent-of-sales method) Sales $ % Less: Cost of goods sold Gross profits $ $ % s $ Less: Operating expenses Net profits before taxes Less: Taxes (rate = 40%) (% Net profits after taxes Less: Cash dividends $ $ $ To Retained earnings $ b. Prepare a pro forma balance sheet, using the judgmental approach Complete assets part of the pro forma balance sheet below: (Round to the nearest dollar.) Pro Forma Balance Sheet Red Queen Restaurants (Judgmental Method) Cash $ $ Marketable securities Accounts receivable Inventories $ $ Total current assets $ Net fixed assets $ Total assets $ Enter any number in the edit fields and then continue to the next question 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 for next year: (1) The firm has estimated that its sales will be $899.100. (2) The firm expects to pay $34.500 in cash dividends. (3) The firm wishes to maintain a minimum cash balance of $31,600. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm's ending inventory will change directly with changes in sales. (6) Red Queen will purchase new machine costing $42.700 and have total depreciation of $15,800. (7) Accounts payable will change directly in response to changes in sales. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement (0) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for next year, using the percent-of-sales method. b. Prepare a pro forma balance sheet for next year, using the judgmental approach. c. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for next year, using the percent-of-sales method. Complete the pro forma income statement for next year below: (Round to the nearest dollar. Round the percentage of sales to four decimal places.) Pro Forma Income Statement Red Queen Restaurants (percent-of-sales method) Sales $ % Less: Cost of goods sold Gross profits $ $ % s $ Less: Operating expenses Net profits before taxes Less: Taxes (rate = 40%) (% Net profits after taxes Less: Cash dividends $ $ $ To Retained earnings $ b. Prepare a pro forma balance sheet, using the judgmental approach Complete assets part of the pro forma balance sheet below: (Round to the nearest dollar.) Pro Forma Balance Sheet Red Queen Restaurants (Judgmental Method) Cash $ $ Marketable securities Accounts receivable Inventories $ $ Total current assets $ Net fixed assets $ Total assets $ Enter any number in the edit fields and then continue to the next
