Jim's Espresso expects sales to grow by

10.0%

next year. Using the following statements

LOADING...

and the percent of sales method, forecast:

a. Costs

b. Depreciation

c. Net Income

d. Cash

e. Accounts receivable

f. Inventory

g. Property, plant, and equipment

(Note:

Make sure to round all intermediate calculations to at least five decimal places.)

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.

Income Statement Balance Sheet $200,000 Assets (100,000) Cash and Equivalents $15,000 Sales Costs Except Depreciation EBITDA Depreciation EBIT $100,000 (6,000) $94,000 Accounts Receivable Inventories 2,000 4,000 $21,000 Interest Expense (net) (400) Total Current Assets Property, Plant, and Equipment Total Assets 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