Pro forma balance sheet Peabody \& Peabody has 2019 sales of $10.6 million. It wishes to analyze expected performance and financing needs for 2021 - 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; 12.3%, Inventory; 18.1%; Accounts payable, 13.7%; Net profit margin, 2.7%. (2) Marketable securities and other current liabilities are expected to remain unchanged. (3) A minimum cash balance of $478,000 is desired. (4) A new machine costing $650,000 will be acquired in 2020 , and equipment costing $847,000 will be purchased in 2021 . Total depreciation in 2020 is forecast as $292,000, and in 2021 $391,000 of depreciation will be taken. (5) Accruals are expected to rise to $505,000 by the end of 2021. (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 $11.4 million in 2020 and $11.4 million in 2021. (10) The December 31, 2019, balance sheet is here a. Prepare a pro forma balance sheet dated December 31, 2021. b. Discuss the financing changes suggested by the statement prepared in part (a). Leonard Industries Balance Sheet December 31, 2019 a. Prepare a pro forma balance sheet dated December 31,2021 . Complete the assets part of the pro forma balance sheet for Peabody \& Peabody for December 31,2021 below: (Round to the nearest dollar.) Complete the liabilities and stockholders' equity part of the pro forma balance sheet for Peabody \& Peabody for December 31,2021 below: (Round to the nearest dollar.) Pro Forma Balance Sheet Peabody \& Peabody December 31, 2021 Liabilities and stockholders' equity Current liabilities Accounts payable Accruals Other current liabilities Total current liabilities Long-term debt Total liabilities Common stock and Retained Earnings Pro forma balance sheet Peabody \& Peabody has 2019 sales of $10.6 million. It wishes to analyze expected performance and financing needs for 2021 - 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; 12.3%, Inventory; 18.1%; Accounts payable, 13.7%; Net profit margin, 2.7%. (2) Marketable securities and other current liabilities are expected to remain unchanged. (3) A minimum cash balance of $478,000 is desired. (4) A new machine costing $650,000 will be acquired in 2020 , and equipment costing $847,000 will be purchased in 2021 . Total depreciation in 2020 is forecast as $292,000, and in 2021 $391,000 of depreciation will be taken. (5) Accruals are expected to rise to $505,000 by the end of 2021. (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 $11.4 million in 2020 and $11.4 million in 2021. (10) The December 31, 2019, balance sheet is here a. Prepare a pro forma balance sheet dated December 31, 2021. b. Discuss the financing changes suggested by the statement prepared in part (a). Leonard Industries Balance Sheet December 31, 2019 a. Prepare a pro forma balance sheet dated December 31,2021 . Complete the assets part of the pro forma balance sheet for Peabody \& Peabody for December 31,2021 below: (Round to the nearest dollar.) Complete the liabilities and stockholders' equity part of the pro forma balance sheet for Peabody \& Peabody for December 31,2021 below: (Round to the nearest dollar.) Pro Forma Balance Sheet Peabody \& Peabody December 31, 2021 Liabilities and stockholders' equity Current liabilities Accounts payable Accruals Other current liabilities Total current liabilities Long-term debt Total liabilities Common stock and Retained Earnings
