Pro-forma financial statements				Fall 17
						Create pro forma financial statements from the information provided below
Income Statement					Year 1	Year 1
		Year 0	Year 1	Year 2	com. size	Sales revenues increase 3.0%
Revenues		17,000			100.00%	Gross margin is 52%
Cost of goods sold		9,200				SG&A increases 1.0%
Gross profit		7,800				$2200 of PP&E is purchased on January 1,
SG&A		4,790				New PP&E is depreciated over 10 years
Depreciation		1,700				Inventory grows in line with COGS
Operating Profit		1,310				Assume that all other asset accounts grow in line with sales (3.0%).
Interest expense		155				Accounts Payable grow in line with COGS
Income before taxes		1,155				Accrued and deferred income taxes grows in line with taxes.
Taxes @35%		404				Long-term debt declines by $200
Net Income		751				Unless otherwise stated, liability accounts grow in line with sales (3.0%)
						Treasury Stock purchases equal $300
Dividends		225				Average interest cost of all interest bearing debt is 1.4%
						Dividend payout ratio is 24%
Addition to retained earnings		526				Tax rate is 35%
						Funding requirements should be financed with short-term debt
Balance Sheet
Assets					Year 1
		Year 0	Year 1	Year 2	com. size	Y2
Cash and cash equivalents		640				Sales revenue decline by 2.0%
Marketable securities		28				Gross margin declinesto 50%
Accounts Receivables		8,200				Inventory grows in line with COGS
Inventory		3,142				SG&A declines by 1%
Prepaid expen. & other assets		1,323				$600of PP&E is sold on January 1 for $600 cash. (Gross =$800, Accumulated depreciation = $200)
Total Current Assets		13,333				Annual depreciation expense declines by $ 80
						Assume that all other asset accounts grow in line with sales. (-2.0%)
Plant property and equipment (gross)		7,607				Accounts Payable grow in line with COGS
Accumulated Depreciation		3,000				Long-term debt declines by $150
PP&E (net)		4,607				Accrued and deferred income taxes grows in line with taxes.
						Unless otherwise stated, liability accounts grow in line with sales (-2.0%)
Total Assets		17,940			100.00%	Treasury Stock purchase is $150.
						Average interest cost of all interest bearing debt is 1.8%
Liabilities & Shareholders' Equity					Year 1	Dividend payout ratio changes to 25%
		Year 0	Year 1	Year 2	com. size	Tax rate is 35%
Accounts payable		3,148				Funding requirements should be financed with short-term debt
Loans & notes payable (plug)		2,423				Excess cash is used to retire short-term debt
Current maturity of long-term debt		500				100 shares of $1 par value common stock is issued for $400.
Accrued income taxes		1,322				Do not add significant amounts to cash unless Loans & notes payable is drawn down to zero.
Total Current Liabilities		7,393
Long-term debt		2,300
Defered income taxes		195
Shareholders' Equity
Common Stock at par		860
Capital Surplus		863
Retained earnings		6,429
Less treasury stock		(100)
Total equity		8,052
Total liabilities & shareholder equity		17,940			100.00%
Statement of Retained Earnings			Year 1	Year 2
Beginning retained earnings
+Net Income
-dividends
Ending retained earnings
Statement of Cash Flows
			Year 1	Year 2
Net Income
+ Depreciation
+ (increase) decrease in A.R.
+ (increase) decrease in inventory
+ (increase) decrease in prepaid exp.
+ increase (decrease) in A.P.
+ increase (decrease) in accrued taxes
+ increase (decrease) in deferred taxes
=Cash Flow from operations
+ (increase) decrease in marketable sec.
+ (increase) decrease in PPE
=Cash Flow from investing
+ increase (decrease) in loans and notes.
+ increase (decrease) in cur. port. of LTD
+ increase (decrease) in LTD
+ increase (decrease) in common stock
- dividends
- treasury stock
=Cash flow from financing
Beginning cash
+Change in cash
Ending cash

What is ending cash in the statement of cash flows for year #2?

Pro-forma financial statements Create pro forma financial statements from the information provided below Year 1 sales revenues ncrease 3.0% Gross margin is52% SG&A ncreases 1.0% $2200 of PP&E is purchased on January 1 New PP&E is deprecisted over 10 years Inventory grows in ine with COGS Assume rat al other asset accounts grow in line with sales (3.0%) Accounts Payable grow in ine with COGS Accrued and deferred income taxes grows in ine weh taxes. Long-term debt decines by $200 Unless otherwise stated, labity accounts grow in line wth sales (3.0%) Treasury Stock purchases equal $300 Average nterest cost of al nterest bearng debt is 1.4% Dividend payout ratio 24% Tax rate is 35% Funding requirements should be financed wth shortterm debt Fall 17 Year 1 Revenues Gross Profit Income before taxes Net h Cash and cash Marketable securtes Accounts Receivables Sales revenue decline by 2.0% Gross margin decinesto 50% nventory grows in line wth COGS SG&A declines by 1% S000of PP&E s sold on January 1 for $600 cash. (Gross-$800, Accumulated depreciation Annual depreciation expense declines by $ 80 increase) decrease in AR increase) decrease in inv increase) decrease in 8 200 & other +increase (decrease) in AP +increase(decrease) in aocruedtawes + increase(decrease) in deletredt Total Current Assets S200 and 7.607 ssume that al other asset accounts grow n ne wen sales (-2.0%) ccounts Payable grow in ine wth COGS Long-term debt decines by $150 Accrued and deterred income taxes grows in ine wth taxes Unless otherwise stated, Mbity accounts grow nine with sales (-2.0%) Treasury Stock purchase is $150 Average interest cost of aiterest bearing debt 1.8% -Cash Flow fr om operations Total Assets ies A Shareholders'E increasel deorease in PPE ash Flow f +increase(decieasel in loans and notes end payout rato changes to 25% Tax rate is 35% Funding requirements should be fnanced with short-term debt Excess cash is used to retire short-term debt 100 shares of $1 par value common stock is issued for $400 Do not add significant amounts to cash unless Loans & notes payable is drawn down to zero +increaseIdecreaselinLTD ncrease deoreasel in hange in Pro-forma financial statements Create pro forma financial statements from the information provided below Year 1 sales revenues ncrease 3.0% Gross margin is52% SG&A ncreases 1.0% $2200 of PP&E is purchased on January 1 New PP&E is deprecisted over 10 years Inventory grows in ine with COGS Assume rat al other asset accounts grow in line with sales (3.0%) Accounts Payable grow in ine with COGS Accrued and deferred income taxes grows in ine weh taxes. Long-term debt decines by $200 Unless otherwise stated, labity accounts grow in line wth sales (3.0%) Treasury Stock purchases equal $300 Average nterest cost of al nterest bearng debt is 1.4% Dividend payout ratio 24% Tax rate is 35% Funding requirements should be financed wth shortterm debt Fall 17 Year 1 Revenues Gross Profit Income before taxes Net h Cash and cash Marketable securtes Accounts Receivables Sales revenue decline by 2.0% Gross margin decinesto 50% nventory grows in line wth COGS SG&A declines by 1% S000of PP&E s sold on January 1 for $600 cash. (Gross-$800, Accumulated depreciation Annual depreciation expense declines by $ 80 increase) decrease in AR increase) decrease in inv increase) decrease in 8 200 & other +increase (decrease) in AP +increase(decrease) in aocruedtawes + increase(decrease) in deletredt Total Current Assets S200 and 7.607 ssume that al other asset accounts grow n ne wen sales (-2.0%) ccounts Payable grow in ine wth COGS Long-term debt decines by $150 Accrued and deterred income taxes grows in ine wth taxes Unless otherwise stated, Mbity accounts grow nine with sales (-2.0%) Treasury Stock purchase is $150 Average interest cost of aiterest bearing debt 1.8% -Cash Flow fr om operations Total Assets ies A Shareholders'E increasel deorease in PPE ash Flow f +increase(decieasel in loans and notes end payout rato changes to 25% Tax rate is 35% Funding requirements should be fnanced with short-term debt Excess cash is used to retire short-term debt 100 shares of $1 par value common stock is issued for $400 Do not add significant amounts to cash unless Loans & notes payable is drawn down to zero +increaseIdecreaselinLTD ncrease deoreasel in hange in