Question 7 (5 points) Saved 1) Listen What is proforma accumulated depreciation in 2020? 100 130 202 333 PROFORMA ASSUMPTIONS Below is GAP Inc.'s financial statements for 2018 and 2019. Proform your is 2020. Due to Covid-19 pandemic, GAP Inc expects that sales growth in 2020 will be 13%. Regardless of lower than expected sales growth, GAP Inc is planning to expand its operations to now cities in 2020. Por the planned expansion, GAP Inc. received $1,700 additional long-term loan from JP Morgan Chase and will use this loan to finance the purchase of a new office building. Salaries are expected be $113. The market conditions will lead COGS will be 10 percent lower than the 2019 level. When projecting the 2020 balance sheet. GAP Inc, believed that the accounts receivable days will be 7 days higher than ACP days of last year Inventory days and accounts payable amount will remain unchanged from 2019 since the business has recently been rewarded with extended payment terms from its suppliers going forward. Current maturities (CMLID), minimum cash ratio and dividend payments will remain same as in 2019. Tax rate is 14%. Taterest rate for long-term loan in 2020 is projected to be 4%. Interest expense on short term debt is delayed until 2021 (this means apply the interest rate only on long-term debt), Rental expense would be $6 months Depreciation expense would be the same percentage of gross fixed assets us was in 2019. With these expectations proforma Net Income will be $794 INCOME STATEMENT Net sales Cost of goods sold Salaries Rental expenses Depr. Expense Interest expense Tax expense Net income (loss) 2018 1,316 332 90 26 12 560 48 248 2015 1,658 673 100 18 30 338 71 428 2018 26 72 85 BALANCE SHEET Cash Accounts receivable Inventory Total Current Assets GFA Accd depre Net fixed assets Total Assets Accounts payable Bank line of credit Current portion due on term loan Total Current Liabilities Long-term debt Total Liabilities Total equity Total Liabilities and Equity 183 1,138 110 1,028 1,211 39 0 70 109 875 984 227 1.211 2019 20 82 78 180 1,575 140 1,435 1,615 52 225 70 347 805 1.152 463 1,615