Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Obligatoire Question (50 Marks) Using the percent-of-sales method and the following financial data, prepare the pro forma balance sheet in order to answer the

image text in transcribed

Obligatoire Question (50 Marks) Using the percent-of-sales method and the following financial data, prepare the pro forma balance sheet in order to answer the following multiple choice questions. Cash Accounts receivable Inventories Assets $25,000 120,000 300,000 Total current assets $445,000 Net fixed assets $500,000 Total assets $945,000 Liabilities and stockholders' equity accounts payable Notes payable $80,000 350,000 Accruals Total current liabilities Long-term debts Total liabilities Stockholders' equity Common stock Retained earning Total Stockholders' equity Total liabilities and stockholders' equity 50.000 $480,000 150,000 $630,000 180,000 135,000 $315,000 $945,000 A financial manager at company XYZ has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning purposes for the coming year ended December 31, 2021. 1- Using the percent-of-sales method and the following financial data, prepare the pro forma balance sheet in order to answer the following multiple choice questions. (a) The firm estimates sales of $1,000,000. (b) The firm maintains a cash balance of $35,000. Accounts receivable represents 25 percent of (c) sales. (d) (e) Inventory represents 15 percent of sales. A new piece of mining equipment costing $150,000 will be purchased in 2010. Total depreciation for 2010 will be $55,000. (f) Accounts payable represents 12 percent of sales. (g) There will be no change in notes payable, accruals, and common stock. (h) The firm plans to retire a long term note of $100,000. (i) Dividends of $45,000 will be paid in 2010 (j)The firm predicts a 5 percent net profit margin. 2- Is the firm need to take a loan or invest in marketable securities? Explain your answer Answer only 2 questions

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin

5th Canadian edition

133472264, 978-0133446265, 133446263, 978-0133472264

More Books

Students also viewed these Accounting questions