Provincial imports has assembled 2015 financial statement income and balance sheet and financial projections for use in preparing financial plans for the coming year 2016

2015 statement

Sales revenue 4,996,000

Less costs of goods sold 2752,000

Gross profits 2,244,000

Less operating expense 850,000

Operating profits 1,394,000

Less interest expense 209,000

Net profits before taxes 1,185,000

Less tax ( rate 40%) 474,000

Net profits after tax 711,000

Less cash dividends 248,850

To retained earnings 462,150

Info related to financial projections for 2016 is

1: projected sales are 6,008,000

2: cost of goods sold in 2015 include 1,001,000 in fixed costs

3: operating expense in 2015 include 252,000 in fixed costs

4: interest expense will remain unchanged

5: the firm will pay cash dividends amounting to 35% of net profits after taxes

6: cash and inventories will double

7: marketable securities, notes payable, long term debt, and common stock will remain unchanged

8: accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales

9:!a new computer costing 351,000 will be purchased during the year. Total depreciation for the year will be 104,000

10: the tax rate will remain at 40%

Prepare a pro forma for year ended December 31 2016 using fixed cost data to improve the accuracy of the percent of sales method

Sales

Less cost of goods sold=

Gross profits=

Less operating expenses=

Operating profits=

Less interest expenses =

Net profit before taxes =

Less tax rate (40%)=

Net profits after taxes =

Less cash dividends (35%)=

To retained earmings=

Prepare a pro forma balance sheet as of dec 31 2016 using info given and judgemental approach. Include a reconciliation of the retained earnings acct. NOTE taxes payable for 2016 are about 20.0422% of the 2015 taxes on the income statement . The pro forma value is obtained by taking 20.0422% of the 2016 taxes

. Complete the assets of the pro forma balance sheet as of dec 31 2016

Cash=

Marketable securities =

Acct receivable =

Inventories=

Total current assets=

Net fixed assets =

Total assets=complete liabilities and equity part of pro forma balance sheet as of December 31 2016 ( judgemental method)

Accounts payable =

Taxes payable =

Notes payable=

Other current liabilities=

Total current liabilities=

Long term debt=

Common stock=

Retained earnings external finds required =

Total liabilities and stockholders equity=

using the judgemental approach the external finds requirement =