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s for 2020: Sales are estimated to be $80,000 in 2020 Assume the following: COGS and $5,000 of the Operating Expenses are Variable Depreciation and
s for 2020: Sales are estimated to be $80,000 in 2020 Assume the following: COGS and $5,000 of the Operating Expenses are Variable Depreciation and the Remainder of the Operating Expenses are Fixed The firm will maintain its dividend payout ratio this year Cash, Accounts Receivable, Inventories, Net Plant, Accounts Payable and Accrued Payables are Spontaneous Market Securities, Bonds Payable and Common Stock are Discretionary $2,500 of Bonds Payable are Current and Will be Repaid at the Beginning of the Year Income Statement Income Statement Pro Forma Cash Flow Statement For the Year Ended December 31, 2019 For the Year Ended December 31, 2020 For the Year Ending December 31, 2020 Sales 70,000 Sales COGS 45,000 COGS Cash Flows From Operations Gross Profit 25,000 Gross Profit Received from Customers Operating Expenses 8,000 Operating Expenses Paid to Suppliers and Employers Depreciation 5,000 Depreciation Interest Paid 13,000 Income Taxes Paid EBIT 12,000 EBIT Net Cash Provided by Operating Activities Interest Expense 1,300 Interest Expense EBT 10,700 EBT Cash Flows From Investments Tax Expense 2,247 Tax Expense Payment for Purchases of PPE Earning After Taxes 8,453 Earning After Taxes Net Cash Used for Investing Activities Dividends 3,000 Dividends Addition to Retained Earnings 5,453 Addition to Retained Earnings Cash Flows From Financing Paid to Retire Bonds Balance Sheet Balance Sheet External Financing Needed December 31, 2019 For the Year Ended December 31, 2020 Divdidens Paid Cash 8,000 Cash Net Cash Used for Financing Activities Marketable Securities 2,000 Marketable Securities Accounts Receivable 10,000 Accounts Receivable Net Increase (Decrease) in Cash Inventories 6,000 Inventories Cash and Equivalents, Beginning of Year Plant, Net 20,000 Plant, Net Cash and Equivalents, End of Year Total Assets 46,000 Total Assets Reconciliation of Net Income to Cash Provided by Operations Accounts Payable 7,000 Accounts Payable Net Income Accrued Payables 3,000 Accrued Payables Depreciation Bonds Payable 10,000 Bonds Payable Increase in A/R Common Stock 15,000 Common Stock Inventories Retained Earnings 11,000 Retained Earnings Increase in A/P 46,000 Accrued Payables External Financing - External Financing Net Cash Provided by Operations Total Liabilities and Equity 46,000 Total Liabilities and Equity
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