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The following information is available for a company. Set up the income statement and balance sheet for 2007, then forecast the income statement and balance

The following information is available for a company. Set up the income statement and balance sheet for 2007, then forecast the income statement and balance sheet for 2008, 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 $100,000 a year on its long term debt.

*On Excel and show formulas.

2007

2008

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

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