Plank's Plumbing Supply Company Plank's Plumbing Supply Company Balance Sheet For the Year Ending December 31, 2008 (all figures in thousands of dollars) Cash Accounts receivable Inventory Current assets Net fixed assets Total assets 1,400 13,160 43,410 57,970 33,030 91,000 Notes payable Accounts payable Deferred taxes Current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity 10,200 510 10,710 38,500 27,800 13,990 91,000 Plank's Plumbing Supply Company Income Statement For the Year Ending December 31, 2008 Sales Cost of goods sold Gross profit Operating expenses Depreciation Operating income Interest expense Earnings before taxes Taxes Net income 163,000 106,120 56,880 30,970 2,200 23,710 5,120 18,590 5,577 13,013 Plank's Plumbing Supply Company Estimated Percentage Distribution of Purchase and Sales 2009 Purchases 5% 6% 7% Month January February March April May June July August September October November December 8% 9% 10% 11% 11% Sales 4% 5% 7% 9% 11% 12% 13% 12% 11% 10% 7% 9% 8% 6% 5% Plank's Plumbing Supply Company - Assumptions for 2009 2009 sales are projected to be $194,000; 30% of all sales are cash sales and 70% of all sales are on credit with credit terms of 72 days; no bad debt. COGS in 2009 will be 65% of sales. Total purchases in 2009 will be $131,000. 40% of all purchases are paid for immediately and the rest (i.e., 60% of monthly purchases) are paid for on credit. Plank's credit terms on purchases are net 48 days (Plank's AP days period was 48 days for all of 2008 and is expected to remain 48 days for all of 2009). Operating expenses (excluding depreciation) in 2009 will be 19% of sales and are expected to be evenly distributed throughout the year. Sales were $15,000 in September 2008, $12,000 in October 2008, $8,000 in November 2008 and $6,000 in December 2008. Purchases were $9,000 in September 2008, $8,000 in October 2008, $7,500 in November 2008 and $12,500 in December 2008. Depreciation expense will be $180 per month on existing fixed assets. The firm's average tax rate for 2009 is expected to be 35%. The minimum cash balance is $750. Tax payments of $2000 will be paid in March, June, September, and December. A payment of $510 will be made in April to pay for taxes due on 2008 income. The company plans to spend $5,500 on new long-term assets in April of 2009. These new assets will be depreciated to a $220 salvage value over 8 years. Depreciation on the new assets will be evenly distributed per month throughout the year. The first month of additional depreciation will occur in May. The interest rate is 12 percent annually (i.e., 1 percent per month). This interest is paid on the prior month's total loan balance (notes payable plus long-term debt). New common stock of $25 will be issued every month as an employee direct purchase plan. No long-term debt repayment will be made during the year. Plank will pay dividends of $125 in May 2009. NOTE: You do NOT have to construct 12 months of statements to answer any of the following questions! 36. What is net income on Plank's January 2009 proforma income statement? 37. What are TOTAL proforma cash inflows for Plank for January 2009? 38. What are TOTAL proforma cash outflows for Plank for January 2009? 39. What is December 2009 proforma net fixed assets? 40. What is December 2009 proforma inventory? Plank's Plumbing Supply Company Plank's Plumbing Supply Company Balance Sheet For the Year Ending December 31, 2008 (all figures in thousands of dollars) Cash Accounts receivable Inventory Current assets Net fixed assets Total assets 1,400 13,160 43,410 57,970 33,030 91,000 Notes payable Accounts payable Deferred taxes Current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity 10,200 510 10,710 38,500 27,800 13,990 91,000 Plank's Plumbing Supply Company Income Statement For the Year Ending December 31, 2008 Sales Cost of goods sold Gross profit Operating expenses Depreciation Operating income Interest expense Earnings before taxes Taxes Net income 163,000 106,120 56,880 30,970 2,200 23,710 5,120 18,590 5,577 13,013 Plank's Plumbing Supply Company Estimated Percentage Distribution of Purchase and Sales 2009 Purchases 5% 6% 7% Month January February March April May June July August September October November December 8% 9% 10% 11% 11% Sales 4% 5% 7% 9% 11% 12% 13% 12% 11% 10% 7% 9% 8% 6% 5% Plank's Plumbing Supply Company - Assumptions for 2009 2009 sales are projected to be $194,000; 30% of all sales are cash sales and 70% of all sales are on credit with credit terms of 72 days; no bad debt. COGS in 2009 will be 65% of sales. Total purchases in 2009 will be $131,000. 40% of all purchases are paid for immediately and the rest (i.e., 60% of monthly purchases) are paid for on credit. Plank's credit terms on purchases are net 48 days (Plank's AP days period was 48 days for all of 2008 and is expected to remain 48 days for all of 2009). Operating expenses (excluding depreciation) in 2009 will be 19% of sales and are expected to be evenly distributed throughout the year. Sales were $15,000 in September 2008, $12,000 in October 2008, $8,000 in November 2008 and $6,000 in December 2008. Purchases were $9,000 in September 2008, $8,000 in October 2008, $7,500 in November 2008 and $12,500 in December 2008. Depreciation expense will be $180 per month on existing fixed assets. The firm's average tax rate for 2009 is expected to be 35%. The minimum cash balance is $750. Tax payments of $2000 will be paid in March, June, September, and December. A payment of $510 will be made in April to pay for taxes due on 2008 income. The company plans to spend $5,500 on new long-term assets in April of 2009. These new assets will be depreciated to a $220 salvage value over 8 years. Depreciation on the new assets will be evenly distributed per month throughout the year. The first month of additional depreciation will occur in May. The interest rate is 12 percent annually (i.e., 1 percent per month). This interest is paid on the prior month's total loan balance (notes payable plus long-term debt). New common stock of $25 will be issued every month as an employee direct purchase plan. No long-term debt repayment will be made during the year. Plank will pay dividends of $125 in May 2009. NOTE: You do NOT have to construct 12 months of statements to answer any of the following questions! 36. What is net income on Plank's January 2009 proforma income statement? 37. What are TOTAL proforma cash inflows for Plank for January 2009? 38. What are TOTAL proforma cash outflows for Plank for January 2009? 39. What is December 2009 proforma net fixed assets? 40. What is December 2009 proforma inventory