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Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here LOADING... to prepare the financial plans. The

Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here LOADING... to prepare the financial plans. The following financial data are also available for next year:
(1) The firm has estimated that its sales will be $ 900,200.
(2) The firm expects to pay $ 34,000 in cash dividends.
(3) The firm wishes to maintain a minimum cash balance of $ 30,000.
(4) Accounts receivable represent approximately 24% of annual sales.
(5) The firm's ending inventory will change directly with changes in sales.
(6) Red Queen will purchase new machine costing $ 43,600 and have total depreciation of $ 16,900.
(7) Accounts payable will change directly in response to changes in sales.
(8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement.
(9) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged.
a. Prepare a pro forma income statement for next year, using the percent-of-sales method.
b. Prepare a pro forma balance sheet for next year, using the judgmental approach.
c. Analyze these statements, and discuss the resulting external financing required. here is additonal details from Red Queen Restaurants Income Statement
for the Year Ended December 31,2019
Sales revenue $799,300
Less: Cost of goods sold 600,500
Gross profits $198,800
Less: Operating expenses 99,100
Net profits before taxes $99,700
Less: Taxes (40%)39,880
Net profits after taxes $59,820
Less: Cash dividends 19,300
To retained earnings $40,520 and Red Queen Restaurants Income Statement
for the Year Ended December 31,2019
Sales revenue $799,300
Less: Cost of goods sold 600,500
Gross profits $198,800
Less: Operating expenses 99,100
Net profits before taxes $99,700
Less: Taxes (40%)39,880
Net profits after taxes $59,820
Less: Cash dividends 19,300
To retained earnings $40,520 and Assets Liabilities and Stockholders' Equity
Cash $32,400 Accounts payable $99,500
Marketable securities 17,200 Taxes payable 20,500
Accounts receivable 149,700 Other current liabilities 6,000
Inventories 99,000 Total current liabilities $126,000
Total current assets $298,300 Long-term debt $197,600
Net fixed assets 351,000 Common stock $150,700
Retained earnings $175,000
Total assets $649,300 Total liabilities and equity $649,300

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