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Posted on Jul 25, 2024

Refer to the income statement and the balance sheet of Secilish International Company presented above Assuming that for 2020 we have: Net addition to Plant

Refer to the income statement and the balance sheet of Secilish International Company presented above Assuming that for 2020 we have: Net addition to Plant and equipment: $280,000 Life of new equipment: 10 years Salvage Value: 0 Interest rate =6% The company uses the straight line method for depreciation Note: * Sales for the year 2020 is forecasted to be $954,000 *Cost of Goods Sold, Selling and G&A Expenses, Salaries Related Accounts receivable, inventory, accounts payables and other current liabilities are expected to change using the percent of sales method. *Cash, long term investment, short-term note payables, LT debt, common stock, and additional paid in capital are expected to remain the same as 2019. * Each item that changes with sales will be the four-year average percentage of sales. Dividends are expected to be $50,000 in 2020. By using the percent of sales method, forecast the income statement and the Balance Sheet accounts for the year 2020. Calculate the DFN needed in 2020 and eliminate it by the Long Term Debt to answer the following questions 1. Using the sales Method, Selling & Administrative Expenses and Salaries 5 points Related for 2020 will be equal to: a. 211,585 and 125,809 respectively O b. 234,585 and 122,809 respectively O c. 291,134 and 141,115 respectively O d. 215,585 and 125,889 respectively O e. None of the above 2. Given that the net addition to PPE = $280,000$ for the year forecasted 5 points 2020, how much is forecasted depreciation expense for the year 2020?* a. Same as last year i.e., equals to depreciation expense 2019 b. 45,000 c. 2019 depreciation Expense + Additional Depreciation Expense to be incurred in 2020 d. b&C e. None of the above 3. Forecasted Interest Expense is calculated using which formula? 5 points a. 2019 Interest Expense - 2018 Interest Expense b. Interest Rate x (2019 Loans + Forecasted Loans), loans include short-term loans and long-term loans c. Interest Rate x (Forecasted Short term debt 2020 + Forecasted Long term debt 2020) O d. a&b O e. None of the above 14:04 Wed 16 Dec . 92% docs.google.com Secilish International Income Statement For the year Ending Dec 31, 2019 All Figures in USD 2019 654,050 198,500 455,550 145,210 85,420 17,000 2018 458,500 125,400 333,100 125,400 75,210 14,000 2017 412,500 120,400 292,100 106,590 63,929 11,900 2016 427,500 150,400 277,100 101,261 60,732 11,305 Sales COGS Gross Profit Selling & Administrative salaries & Related Depreciation & Amortization Earnings before Interest and Tax (EBIT) Interest Expense Earnings before Tax (EBT) Taxes Net Income 207,920 55,000 152,920 61,168 91,752 118,490 46,540 71,950 28,780 43,170 109,682 42,040 67,642 27,057 40,585 103,802 49,940 53,862 21,545 32,317 Tax Rate 40% 40% 40% 40% Secilish International Proforma Balance Sheet As of Dec 31, 2019 ABF in USD 2019 Cash & Equivalents Accounts Receivables Toral Current Assets Geass PPE Accumulated Depreciation Net Fred As 135,450 241,000 421.700 650410 85.000 565410 987110 2018 32.580 121,500 312.500 466,580 457,320 68.000 389 320 833.900 2017 40,000 320,000 656.000 1,016,000 426,000 122.000 304.000 1,320,000 2016 48.000 280.000 572.000 900.000 376,000 116.000 200.000 1.160.000 Zlate and Owner's Equity Accounts Payable Short-term Notes Payables Other Current Liabines Total Current Labolines Long-term Debt Total Liables Common Equity Retained Earting Total Shareholder's Equity Total Llanes and Equity 193450 142.650 58.000 396,500 209 400 605.900 200,000 181210 381.210 987.110 352.000 84.520 65,420 501,940 109.400 611,340 143,000 101.500 244,560 855.900 160.000 140,000 112.000 412.000 336.000 748,000 400.000 172.000 $72.000 1,320,000 95000 116,000 108.000 320,000 250.000 576.000 400,000 184000 384.000 1.160,000 - Refer to the income statement and the balance sheet of Secilish International Company presented above Assuming that for 2020 we have: Net addition to Plant and equipment: $280,000 Life of new equipment: 10 years Salvage Value: 0 Interest rate =6% The company uses the straight line method for depreciation Note: * Sales for the year 2020 is forecasted to be $954,000 *Cost of Goods Sold, Selling and G&A Expenses, Salaries Related Accounts receivable, inventory, accounts payables and other current liabilities are expected to change using the percent of sales method. *Cash, long term investment, short-term note payables, LT debt, common stock, and additional paid in capital are expected to remain the same as 2019. * Each item that changes with sales will be the four-year average percentage of sales. Dividends are expected to be $50,000 in 2020. By using the percent of sales method, forecast the income statement and the Balance Sheet accounts for the year 2020. Calculate the DFN needed in 2020 and eliminate it by the Long Term Debt to answer the following questions 1. Using the sales Method, Selling & Administrative Expenses and Salaries 5 points Related for 2020 will be equal to: a. 211,585 and 125,809 respectively O b. 234,585 and 122,809 respectively O c. 291,134 and 141,115 respectively O d. 215,585 and 125,889 respectively O e. None of the above 2. Given that the net addition to PPE = $280,000$ for the year forecasted 5 points 2020, how much is forecasted depreciation expense for the year 2020?* a. Same as last year i.e., equals to depreciation expense 2019 b. 45,000 c. 2019 depreciation Expense + Additional Depreciation Expense to be incurred in 2020 d. b&C e. None of the above 3. Forecasted Interest Expense is calculated using which formula? 5 points a. 2019 Interest Expense - 2018 Interest Expense b. Interest Rate x (2019 Loans + Forecasted Loans), loans include short-term loans and long-term loans c. Interest Rate x (Forecasted Short term debt 2020 + Forecasted Long term debt 2020) O d. a&b O e. None of the above 14:04 Wed 16 Dec . 92% docs.google.com Secilish International Income Statement For the year Ending Dec 31, 2019 All Figures in USD 2019 654,050 198,500 455,550 145,210 85,420 17,000 2018 458,500 125,400 333,100 125,400 75,210 14,000 2017 412,500 120,400 292,100 106,590 63,929 11,900 2016 427,500 150,400 277,100 101,261 60,732 11,305 Sales COGS Gross Profit Selling & Administrative salaries & Related Depreciation & Amortization Earnings before Interest and Tax (EBIT) Interest Expense Earnings before Tax (EBT) Taxes Net Income 207,920 55,000 152,920 61,168 91,752 118,490 46,540 71,950 28,780 43,170 109,682 42,040 67,642 27,057 40,585 103,802 49,940 53,862 21,545 32,317 Tax Rate 40% 40% 40% 40% Secilish International Proforma Balance Sheet As of Dec 31, 2019 ABF in USD 2019 Cash & Equivalents Accounts Receivables Toral Current Assets Geass PPE Accumulated Depreciation Net Fred As 135,450 241,000 421.700 650410 85.000 565410 987110 2018 32.580 121,500 312.500 466,580 457,320 68.000 389 320 833.900 2017 40,000 320,000 656.000 1,016,000 426,000 122.000 304.000 1,320,000 2016 48.000 280.000 572.000 900.000 376,000 116.000 200.000 1.160.000 Zlate and Owner's Equity Accounts Payable Short-term Notes Payables Other Current Liabines Total Current Labolines Long-term Debt Total Liables Common Equity Retained Earting Total Shareholder's Equity Total Llanes and Equity 193450 142.650 58.000 396,500 209 400 605.900 200,000 181210 381.210 987.110 352.000 84.520 65,420 501,940 109.400 611,340 143,000 101.500 244,560 855.900 160.000 140,000 112.000 412.000 336.000 748,000 400.000 172.000 $72.000 1,320,000 95000 116,000 108.000 320,000 250.000 576.000 400,000 184000 384.000 1.160,000