Last Question For the jackson automotive systems case 1 Based on the data, what are the reasons you would or would not extend the loan Exhibit 1 Forecast Balance Sheets, Fiscal Year 2013 (thousands of dollars) 2013 2013 Forecast May June July August September Cash 4,994 2,720 10,796 6,532 (1,372) Accounts receivable a 3,744 10,881 6,474 7,201 7,394 Inventory 12,163 7,482 6,936 6,524 5,963 Current assets 20,901 21,082 24,206 20,257 11,985 Gross PP E 45,500 45,500 45,500 47,900 47,900 Accumulated depreciation b 31,448 31,568 31,688 31,818 31,948 Net PP E 14,052 13,932 13,812 16,082 15,952 Prepaid expenses 54 54 54 54 54 Total assets 35,007 35,068 38,072 36,393 27,991 Accounts payable c 5,950 5,950 5,950 5,950 5,950 Notes payable, bank 5,000 5,000 7,400 7,400 Accrued taxes d 273 548 799 1,034 906 Other accrued expenses 1,142 1,142 1,142 1,142 1,142 Customer advance payments 2,700 900 Current liabilities 15,065 13,540 15,291 15,526 7,998 Shareholders equity 19,923 21,186 21,672 22,128 21,408 Total liabilities and equity 34,988 34,726 36,963 37,654 29,405 a Selling term of net 30 days b Depreciation of $120,000 per month through July 2013, $130,000 per month as of August 2013 c Purchase terms of net 30 days d Taxes payable for 2013 were assumed to be $1,500,000 and would be paid on December 15, 2012, March 15, 2013, June 15, 2013 and September 15, 2013 in equal increments Cash Calculation (342) (1,108) 1,261 1,414 Exhibit 2 Forecast Income Statements, Fiscal Year 2013 (thousands of dollars) FY 2013 Eight Months Ended May Forecast 2013 June Forecast 2013 July Forecast 2013 August Forecast 2013 September Forecast FY 2013 Twelve Months Ended June Net sales 44,014 12,681 7,374 7,201 7,394 78,664 COGS 34,297 9,881 5,746 5,611 5,762 61,297 Gross Profit 9,717 2,800 1,628 1,590 1,632 17,367 Operating expenses 5,608 750 750 750 750 8,608 Depreciation and amortization 960 120 120 130 130 1,460 Interest expense a 200 25 25 37 37 324 Interest income b 60 8 5 18 11 102 Profit (loss) before tax 3,009 1,913 737 691 726 7,076 Income taxes c 1,023 650 251 235 247 2,406 Net income (loss) 1,986 1,263 487 456 479 4,671 Dividends 400 1,200 a 6 annualized interest rate charged on outstanding bank loans b 2 annualized rate of return on beginning monthly cash balances c The federal tax rate on all earnings was 34 FYI COGS to Net sales 77 9 77 9 77 9 77 9 77 9 77 9

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 20, 2024

Exhibit 1 - Forecast Balance Sheets, Fiscal Year 2013 (thousands of dollars)

	2013	2013 Forecast
	May	June	July	August	September
Cash	4,994	2,720	10,796	6,532	(1,372)
Accounts receivable^a	3,744	10,881	6,474	7,201	7,394
Inventory	12,163	7,482	6,936	6,524	5,963
Current assets	20,901	21,082	24,206	20,257	11,985

Gross PP&E	45,500	45,500	45,500	47,900	47,900
Accumulated depreciation^b	31,448	31,568	31,688	31,818	31,948
Net PP&E	14,052	13,932	13,812	16,082	15,952
Prepaid expenses	54	54	54	54	54
Total assets	35,007	35,068	38,072	36,393	27,991

Accounts payable^c	5,950	5,950	5,950	5,950	5,950
Notes payable, bank	5,000	5,000	7,400	7,400	-
Accrued taxes^d	273	548	799	1,034	906
Other accrued expenses	1,142	1,142	1,142	1,142	1,142
Customer advance payments	2,700	900	-	-	-
Current liabilities	15,065	13,540	15,291	15,526	7,998

Shareholders equity	19,923	21,186	21,672	22,128	21,408
Total liabilities and equity	34,988	34,726	36,963	37,654	29,405

^aSelling term of net 30 days
^bDepreciation of $120,000 per month through July 2013, $130,000 per month as of August 2013
^cPurchase terms of net 30 days
^dTaxes payable for 2013 were assumed to be $1,500,000 and would be paid on December 15, 2012, March 15, 2013, June 15, 2013 and September 15, 2013 in equal increments.

Cash Calculation		(342)	(1,108)	1,261	1,414

Exhibit 2 - Forecast Income Statements, Fiscal Year 2013 (thousands of dollars)

	FY 2013 Eight Months Ended May	Forecast 2013 June	Forecast 2013 July	Forecast 2013 August	Forecast 2013 September	Forecast FY 2013 Twelve Months Ended June
Net sales	44,014	12,681	7,374	7,201	7,394	78,664
COGS	34,297	9,881	5,746	5,611	5,762	61,297
Gross Profit	9,717	2,800	1,628	1,590	1,632	17,367

Operating expenses	5,608	750	750	750	750	8,608
Depreciation and amortization	960	120	120	130	130	1,460
Interest expense^a	200	25	25	37	37	324
Interest income^b	60	8	5	18	11	102
Profit (loss) before tax	3,009	1,913	737	691	726	7,076
Income taxes^c	1,023	650	251	235	247	2,406
Net income (loss)	1,986	1,263	487	456	479	4,671
Dividends	400				1,200

^a6% annualized interest rate charged on outstanding bank loans.
^b2% annualized rate of return on beginning monthly cash balances.
^cThe federal tax rate on all earnings was 34%.

FYI
% COGS to Net sales	77.9%	77.9%	77.9%	77.9%	77.9%	77.9%