Jim's Espresso expects sales to grow by

10.0%

next year. Assume that Jim's pays out

90%

of its net income. Use the following statements

and the percent of sales method to forecast:

a. Stockholders' equity

b. Accounts payable

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

Balance Sheet $200,000 Assets (100,000) Cash and Equivalents $15,000 Income Statement Sales Costs Except Depreciation EBITDA Depreciation EBIT $100,000 (6,000) $94,000 2,000 4,000 $21,000 Accounts Receivable Inventories Total Current Assets Property, Plant, and Equipment Total Assets Interest Expense (net) (400) 10,000 Pre-tax Income $31,000 Income Tax Net Income $93,600 (23,400) $70,200 Liabilities and Equity. Accounts Payable Debt Total Liabilities Stockholders' Equity Total Liabilities and Equity $1,500 4,000 $5,500 25,500 $31,000