Q R S T U Projected B D E F G H 1 J K L M N 0 i Franco-American Imports - Pro-Forma Statements 2 3 Franco-American Imports Franco-American Imports 4 Income Statement Balance Sheet 5 (000s) (000s) 6 Actual Projected Actual Actual Projected 7 2021 2022 2021 2022 2021 2022 8 Sales 5,000 Assets Liabilities & Equity 9 COGS 2,750 Cash 200 Accounts Payable 700 10 Marketable securitie: 275 Taxes Payable 95 11 Gross Margin 2,250 Accounts Receivable 625 Notes Payable 200 12 Inventories 500 Other current Liabilities 5 13 Operating Expenses 850 Total current asset: 1,600 Total Current Liabilities 1,000 14 15 Operating profits 1,400 Net Fixed Assets 1,400 Long-Term Debt 500 16 Interest Expense 200 Financing Required 17 Profit Before Tax 1,200 Total Assets 3,000 Common Stock 125 18 Tax @ 40% 480 Retained Earnings 1,375 19 Net profit after tax 720 20 Total Liabilities & Equit 3,000 21 Memo: Cash Dividends 288 22 23 Assumptions for 2022 (all numbers in (ODOs): 24 Sales are projected to increase by 20% over 2021 25 COGS includes $1,000 in fixed costs 26 Operating Expenses include $250 in fixed costs 27 The firm will pay cash dividends of 40% of net profits after tax 28 Cash will double 29 Due to a large purchase, inventory turnover will decline to 3.1X 30 Marketable securities, notes payable, ling-term debt and common stock will remain unchanged. 31 A/R days and A/P days are expected to remain the same as 2021 32 Other current liabilities will change in direct response to the change in sales 33 A new computer system costing $356 will be purchased during the year 34 Total depreciation expense for the year will be $110 35 36 37 Assignment 38 a) Prepare a pro-forma income statement for 2022 using the fixed cost data given to improve the accuracy of the percent of sales method 39 b) Prepare a pro-foma balance sheet as of December 31, 2022, using the information given and the judgmental approach. Include a reconciliation of the retained eamings account 40 c) Analyze these statements, and determine the resulting external financing required. 41 Q R S T U Projected B D E F G H 1 J K L M N 0 i Franco-American Imports - Pro-Forma Statements 2 3 Franco-American Imports Franco-American Imports 4 Income Statement Balance Sheet 5 (000s) (000s) 6 Actual Projected Actual Actual Projected 7 2021 2022 2021 2022 2021 2022 8 Sales 5,000 Assets Liabilities & Equity 9 COGS 2,750 Cash 200 Accounts Payable 700 10 Marketable securitie: 275 Taxes Payable 95 11 Gross Margin 2,250 Accounts Receivable 625 Notes Payable 200 12 Inventories 500 Other current Liabilities 5 13 Operating Expenses 850 Total current asset: 1,600 Total Current Liabilities 1,000 14 15 Operating profits 1,400 Net Fixed Assets 1,400 Long-Term Debt 500 16 Interest Expense 200 Financing Required 17 Profit Before Tax 1,200 Total Assets 3,000 Common Stock 125 18 Tax @ 40% 480 Retained Earnings 1,375 19 Net profit after tax 720 20 Total Liabilities & Equit 3,000 21 Memo: Cash Dividends 288 22 23 Assumptions for 2022 (all numbers in (ODOs): 24 Sales are projected to increase by 20% over 2021 25 COGS includes $1,000 in fixed costs 26 Operating Expenses include $250 in fixed costs 27 The firm will pay cash dividends of 40% of net profits after tax 28 Cash will double 29 Due to a large purchase, inventory turnover will decline to 3.1X 30 Marketable securities, notes payable, ling-term debt and common stock will remain unchanged. 31 A/R days and A/P days are expected to remain the same as 2021 32 Other current liabilities will change in direct response to the change in sales 33 A new computer system costing $356 will be purchased during the year 34 Total depreciation expense for the year will be $110 35 36 37 Assignment 38 a) Prepare a pro-forma income statement for 2022 using the fixed cost data given to improve the accuracy of the percent of sales method 39 b) Prepare a pro-foma balance sheet as of December 31, 2022, using the information given and the judgmental approach. Include a reconciliation of the retained eamings account 40 c) Analyze these statements, and determine the resulting external financing required. 41