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4. Dragon Telecommunications Inc. wants to create forecasted financial statements for 2018 based on its accounting data in 2017. In 2017 total revenue was $1,550,000; cost of goods sold was $1,250,000; selling and G&A expenses were $110,000 depreciation expense was $15,000: interest expense was $25,000; the average tax rate was 35%, and the number of shares outstanding was 80.000 Also, in 2017 Dragon had cash of $20,000; accounts receivable of S120,000: inventory of $220,000: plant & equipment of $1,150,000 with an accumulated depreciation of $250.000 Accounts payable, notes payable, long-term debt, common stock, additional paid-in-capital, and retained earnings represented 7%, 0.5%, 20%, 44.5%, 12%, and 16% of total assets, respectively. For 2018, Dragon expects a 25% increase in total revenue, while cost of goods sold and selling and G&A expenses are expected to remain at the same proportion of total revenue as in 2017. Both total plant and equipment and depreciation expense will increase by 12%. Similarly, long-term debt is forecasted, and interest expense will increase by 20%, but the tax rate and the number of shares outstanding will remain constant. Additionally, accounts receivable, inventory, accounts payable, and notes payable are expected to increase 15% while common stock and paid-in-capital will increase by 25%. Cash increases by S132.327.50 and Retaining Earning increased by S61,977.50. The dividend policy in 2018 will be based on a dividend payout ratio of 50%. In other words, 50% of forecasted carnings will be paid to shareholders as dividends. 199 Pince LIDI CS & PC Ass Top Increase 29 Using these projections, create the forecasted 2018 income statement, balance sheet, and statement of cash flows for Dragon Telecommunications Inc. Each statement should be on a separate worksheet. Cashow by 4. Dragon Telecommunications Inc. wants to create forecasted financial statements for 2018 based on its accounting data in 2017. In 2017 total revenue was $1,550,000; cost of goods sold was $1,250,000; selling and G&A expenses were $110,000 depreciation expense was $15,000: interest expense was $25,000; the average tax rate was 35%, and the number of shares outstanding was 80.000 Also, in 2017 Dragon had cash of $20,000; accounts receivable of S120,000: inventory of $220,000: plant & equipment of $1,150,000 with an accumulated depreciation of $250.000 Accounts payable, notes payable, long-term debt, common stock, additional paid-in-capital, and retained earnings represented 7%, 0.5%, 20%, 44.5%, 12%, and 16% of total assets, respectively. For 2018, Dragon expects a 25% increase in total revenue, while cost of goods sold and selling and G&A expenses are expected to remain at the same proportion of total revenue as in 2017. Both total plant and equipment and depreciation expense will increase by 12%. Similarly, long-term debt is forecasted, and interest expense will increase by 20%, but the tax rate and the number of shares outstanding will remain constant. Additionally, accounts receivable, inventory, accounts payable, and notes payable are expected to increase 15% while common stock and paid-in-capital will increase by 25%. Cash increases by S132.327.50 and Retaining Earning increased by S61,977.50. The dividend policy in 2018 will be based on a dividend payout ratio of 50%. In other words, 50% of forecasted carnings will be paid to shareholders as dividends. 199 Pince LIDI CS & PC Ass Top Increase 29 Using these projections, create the forecasted 2018 income statement, balance sheet, and statement of cash flows for Dragon Telecommunications Inc. Each statement should be on a separate worksheet. Cashow by
