The following information is available for a company. Set up the income statement and balance sheet for 2008, then forecast the income statement and balance sheet for 2009, assuming sales grow by 15%

During 2008 the company is going to buy a $300,000 machine, depreciated SL over 6 years. It will do its financing for next year using bonds that have a coupon rate of 8%. It pays off $100,000 a year on its long term debt.

2008

2009

Additional Financing Necessary

Dividends (30% payout)

Taxable Income

Depreciation

$50,000

Cash

$175,000

Accruals

$50,000

Raw material

$400,000

Curr. Assets

LTD at 10%

$600,000

Labor

$312,500

Accum. Depr.

$475,000

ST portion of LTD

$100,000

A/P

$50,000

TL & NW

Operating Costs

$125,000

A/R

$275,000

Curr. Liab.

GFA

$1,550,000

Sales

$1,250,000

Total Assets

CS

$480,000

Interest

$76,000

Contri. To RE

COGS

NFA

EBIT

Other Fixed Costs

$55,000

Taxes (40%)

Gross Profits

RE

$425,000

Inv.

$255,000

N/P at 8%

$75,000

After Tax Income

Show formula sheet for steps please.

2008 2009 $50,000 $175,000 $50,000 $400,000 $600,000 $312,500 $475,000 $100,000 $50,000 Additional Financing Necessary Dividends (30% payout) Taxable income Depreciation Cash Accruals Raw material Curr. Assets LTD at 10% Labor Accum. Depr. ST portion of LTD AIP TL & NW Operating costs A/R Curr. Liab. GFA Sales Total Assets CS Interest Contri. TO RE COGS NFA EBIT Other Fixed Costs Taxes (40%) Gross Profits RE iny NP at 8% After Tax Income $125,000 $275,000 $1,550,000 $1,250,000 $480.000 $76,000 $55.000 $425.000 S255,000 S75.000