mathxl.com + Content Do Homework - Assignment 2 2020-1 ITF 311 - Business Finance 3 CEM_SMALL AKKO : 01/09/21 10:29 PM Homework: Assignment 2 Save 4 of 4 (4 complete) HW Score: 60.88%, 60.88 of 100 pts Score: 0 of 35 pts wr42 (SITTAI LUJ QUOSLUITIUI ? -------- Integrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet ) and financial projections for use in preparing financial plans for the coming year. Information related to financial projections for next year is as follows: (1) Projected sales are $5,991,000. (2) Cost of goods sold last year includes $999,000 in fixed costs. (3) Operating expense last year includes $259,000 in fixed costs. (4) Interest expense will remain unchanged. (5) The firm will pay cash dividends amounting to 45% of net profits after taxes. (6) Cash and inventories will double. (7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. (8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. (9) A new computer system costing $354,000 will be purchased during the year. Total depreciation expense for the year will be $107,000. (10) The tax rate will remain at 40%. a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales method. (percent-of-sales method) Sales $ 5,991,000 Data Table Less: Cost of goods sold Gross profits $ Less: Operating expenses (Click on the icon here - in order to copy the contents of the data table below into a spreadsheet.) Operating profits $ Provincial Imports, Inc. Income Statement Less: Interest expense 200,000 for the Year Just Ended $ Sales revenue Net profits before taxes $4,999,000 Less: Cost of goods sold 2,746,000 Less: Taxes (rate = 40%) Gross profits $2,253,000 Net profits after taxes $ Less: Operating expenses 850,000 Less: Cash dividends (45%) Operating profits $1,403,000 Less: Interest expense 200,000 To Retained earnings $ Net profits before taxes $1,203,000 Less: Taxes (rate = 40%) 481,200 Net profits after taxes $721,800 Enter any number in the edit fields and then click Check Answer. Less: Cash dividends 324,810 To retained earnings $396,990 Eck Answer remaining (Click on the icon here a in order to copy the contents of the data table below into a spreadsheet.) 3 parts Proyingial Imnorts Inc Balance Sheet