Peabody & Peabody has 2015 sales of $10.4 million. It wishes to analyze expected performance and financing needs for 20172 years ahead. Given the following information, respond to parts a. and b.

(1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable,12.1%, Inventory, 18.4%; Accounts payable,14.3%; Net profitmargin, 2.9%.

(2) Marketable securities and other current liabilities are expected to remain unchanged.

(3) A minimum cash balance of $476,000 is desired.

(4) A new machine costing $647,000 will be acquired in 2016, and equipment costing $850,000 will be purchased in 2017. Total depreciation in 2016 is forecast as $290,000, and in 2017 $388,000 of depreciation will be taken.

(5) Accruals are expected to rise to $496,000 by the end of 2017.

(6) No sale or retirement of long-term debt is expected.

(7) No sale or repurchase of common stock is expected.

(8) The dividend payout of 50% of net profits is expected to continue.

(9) Sales are expected to be $11.3 million in 2016 and $11.5 million in 2017.

(10) The December 31, 2015, balance sheet is here.

a. Prepare a pro forma balance sheet dated December 31, 2017.

b. Discuss the financing changes suggested by the statement prepared in part (a).

Pro forma balance sheet Pesbody &Peabody has 2015 sales of $10.4 milion. It wishes to analyze expected performance and financing needs for 2017-2 years ahead. Given the following information, respond to parts a and b (1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable: 12.1%, hemory: 18.4%, Accounts payable, 143% Net profit margin, 2 9% (2) Marketable securities and other cument liabilities are expected to remain unchanged (3) A minimum cash balance of $476,000 is desred (4) A new mschine costing $647,000 will be acquired in 2016, and equipment costing $850,000 wil be purchased in 2017. Total depreciation in 2016 is forecast as $290,000, and in 2017 $388,000 of depreciation will be taken (5) Accnaals are expected to rise to $496,000 by the end of 2017 (6) No sale or retirement of long-tem debt is expected (7) No sale or repurchase of common stock is expected (B) The drvidend payout of 50% of net profits 1s expected to continue (9) Sales are expected to be $11.3 million in 2016 and $11.5 million in 2017. a. Prepare a pro forma balance sheet dated December 31, 2017 Complete the assets part of the pro forma balance sheet for Peabody&Peabody for December 31,2017 below: (Round to the nearest dollar Pro Forma Bslance Sheet Peabody & Peabody December 31,2017 Assets Current 8ssets Cash Marketable securities Accounts receivable ventories Total current assets Net fored assets Total assets a. Prepare a pro forma balance sheet dated December 31, 2017 b. Discuss the financing changes suggested by the statement prepared in part ( a. Prepare a pro forma balance sheet dated December 31, 2017 Complete the assets part of the pro forma balance sheet for Peabody& Peabod Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Leonard Industries Balance Sheet December 31, 2015 $397,000 Acunts payable Assets Cash Marketable securities Accounts receivable Inventories Liabilities and Stockholders' Equity 1,395,000 403,000 79,500 $1,877,500 2,000,500 3,719,000 205,000 Accruals 1,199,000 Other current liabilities 1,795,000 Total current liabilities Total current assets $3,596,000 Long-term debt Net fixed assets 4,001,000 Common stock Total liabilities and $7,597,000 Total assets $7,597,000 stockholders' equity PrintDone