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We prepared the statements for Quarter 1 (Q1) in class. Prepare the statements for Q2 (April 1 - June 30) based on the following assumptions: April's sales. $100.000: May's sales. $150.000: and. June's sales. $200,000. Indicate your answers on page 2 and show your work on page 3. EVERYTHING ELSE STAYS THE SAME AS IN THE QUESTION IN THE NOTES. PROJECTED (estimated) sales for 2021 (in "000s): January $55 July $80 February $55 August $550 March $55 September $690 April $100 October $830 May $150 November $850 June $200 December $960 Since we completed Quarter 1 in class, start with those balances and Prepare Pro-Forma financial statements for the second quarter of 2021 ASSIGNMENT #2 - Chapter 4 (Part 2) NAME (Last, First): (12 marks) Student No.: XYZ Company PRO FORMA Quarterly Income Statements Q1 02 Sales $165,000 Cost of goods sold 115.500 Gross profit 49,500 Operating expenses 138,000 Depreciation expense 131.250 Income before interest & taxes (219,750) Interest expense 25,000 Income before taxes (244.750) Income tax122.375 (expense)/recovery Net Income $122.375) PRO FORMA Quarterly Balance Sheets 01 92 Cash $815.500 Accounts receivable 110,000 Inventory 947.000 Plant & equipment 10.500,000 Accumulated depreciation 4.031.250 Total Assets $8 341.250 Accounts payable $125,000 Line of credit Interest payable 25.000 Taxes payable (122,375) Current portion of LT debt 200,000 Long-term debt 3.400,000 Common shares 1,800,000 Retained earnings 2.913.625 Total Liabilities & Sh. Equity 58 341.250 SHOW YOUR WORK: Q 1125 Question You have been provided with the 2020 financial statements of XYZ Inc.Y"XYZ") (reproduced below) and the following additional information fall amounts are in 2008): The demand for XYZ's products is highly seasonal, but the firm employs level production throughout the year because of its limited plant capacity Cost of goods sold is 70% of sales. Estimated costs of goods manufactured (COGM) for 2021 is 3,010. Due to level production, the value of goods produced each month is the same COGM = 430 . = 3,010 and Monthly production - 3.010 +12 = $250.833) Accounts payable, for the purchases of raw materials (RM"), are paid in the month following purchase and owing to level production, are constant at $125 at the end of each month Thus, purchases each month = JOURNAL ENTRIES: AP Raw Material Inventory 125 AP 125 Operating expenses are $46 per month Depreciation expense (on non-manufacturing assets) is calculated on a straight-line basis and equals $525 per year. All sales are on credit and accounts receivable are collected 2 months after the sale Bad debts are negligible XYZ wants to maintain a MINIMUM cash balance of $150 The company has a $1.000 line of credit available at the bank that is used for any cash deficiencies (as needed). Any excess cash over the minimum required will be used to reduce the line of credit, where applicable Income taxes are levied at a rate of 50 percent and are paid three months after the year-end (for the full year) Long-term debt repayments of $100 and interest payments of $50 are made at the end of June and December. For simplicity, ignore interest on the line of credit Annual dividends of $15 are declared and paid at the end of December XYZ Inc. Income Statement for the Year Ended December 31, 2020 fin000) Sales Cost of goods sold 2.904 Gross margin $1,245 Operating expenses 552 Depreciation expense 525 Income before interest and taxes $168 Interest expense 100 Income before taxes $68 Income tax expense 34 Net income $34 4-31 $4.149 200 21 XYZ Inc. Balance Sheet as at December 31, 2020 (in '000s) $150 1,750 310 $2,210 ASSETS Cash Accounts receivable L32 + Inventory Total current assets Property, plant and equipment ("PP&E) Less: Accumulated depreciation PP&E, net Total assets $10,500 3.900 6.600 $8.810 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Bank loan (line of credit) Interest payable Income tax payable (paid 3/13/2021 $125 215 0 34 200 $574 3.400 3,974 1.800 3.036 $8.810 Current portion of long-term debt Total current liabilities Long-term debt (net of current portion) Total liabilities Common shares (Capital stock) Retained earnings Total liabilities and shareholders' equity ACTUAL sales for 2020 (in '000s): November $820 December PROJECTED (estimated) sales for 2021 (in '000s): January $55 July February $55 August March $55 September April $55 M October May $60 November June December REQUIRED: $930 $80 $550 $690 $830 $850 $960 $60 200 Prepare Pro-Forma financial statements for the first quarter of 2021. Tem "HIGHLY SEASONAL". January to July Sales August to December Sales - 430 = 9.77% of yearly sales = 90.23% of yearly sales Total Sales $4.300 4-32 You have been provided with the 2020 financial statements of XYZ Inc. "XYZ") (reproduced The demand for XYZ's products is highly seasonal but the firm employs level production Cost of goods sold is 70% of sales. Estimated costs of goods manufactured (COGM) for 2021 is Question yo below) and the following additional information (all amounts are in "0008): throughout the year because of its limited plant capacity . 3,010. Due to level production, the value of goods produced each month is the same COGM = _430.70 Accounts payable for the purchases of raw materials ("RM"), are paid in the month = 3,010 and Monthly production = 3,010 +12 = $250.833) following purchase and owing to level production are constant at $125 at the end of each month Thus, purchases each month = JOURNAL ENTRIES: 125 Raw Material Inventory 125 AP 125 Operating expenses are $46 per month Depreciation expense (on non-manufacturing assets) is calculated on a straight-line basis and equals $525 per year. All sales are on credit and accounts receivable are collected 2 months after the sale. Bad debts are negligible XYZ wants to maintain a MINIMUM cash balance of $150 The company has a $1,000 line of credit available at the bank that is used for any cash deficiencies (as needed). Any excess cash over the minimum required will be used to reduce the line of credit where applicable Income taxes are levied at a rate of 50 percent and are paid three months after the year-end (for the full year) Long-term debt repayments of $100 and interest payments of $50 are made at the end of June and December. For simplicity, ignore interest on the line of credit. Annual dividends of $15 are declared and paid at the end of December XYZ Inc. Income Statement for the Year Ended December 31, 2020 (in '000s Sales Cost of goods sold 2904 Gross margin $1.245 Operating expenses 552 Depreciation expense 525 Income before interest and taxes $168 Interest expense 100 Income before taxes $68 Income tax expense Net income $34 4-31 $4.149, 007 34 Item XYZ Inc. Balance Sheet as at December 31, 2020 (in 000s) $150 1,750 310 $2,210 ASSETS Cash Accounts receivable Llo Inventory Total current assets Property, plant and equipment ("PP&E") Less: Accumulated depreciation PP&E, net Total assets $10,500 3.900 6.600 $8.810 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Bank loan (line of credit) Interest payable Income tax payable prid_341312021 Current portion of long-term debt Total current liabilities Long-term debt (net of current portion) Total liabilities Common shares (Capital stock) Retained earings Total liabilities and shareholders' equity $125 215 0 34 200 $574 3.400 3.974 1,800 3.036 $8.810 ACTUAL sales for 2020 (in 1000s): November $820 December $930 PROJECTED (estimated) sales for 2021 (in '000s): January $55 July February $55 August March $55 September $55 Atv April October $60 November May June December $80 $550 $690 $830 $850 $960 Is S60 200 REQUIRED: Prepare Pro-Forma financial statements for the first quarter of 2021 and "HIGHLY SEASONAL": January to July Sales 930 = 9.77% of yearly sales August to December Sales = 3890 = 90.23% of yearly sales Total Sales $4.300 4-32 We prepared the statements for Quarter 1 (Q1) in class. Prepare the statements for Q2 (April 1 - June 30) based on the following assumptions: April's sales. $100.000: May's sales. $150.000: and. June's sales. $200,000. Indicate your answers on page 2 and show your work on page 3. EVERYTHING ELSE STAYS THE SAME AS IN THE QUESTION IN THE NOTES. PROJECTED (estimated) sales for 2021 (in "000s): January $55 July $80 February $55 August $550 March $55 September $690 April $100 October $830 May $150 November $850 June $200 December $960 Since we completed Quarter 1 in class, start with those balances and Prepare Pro-Forma financial statements for the second quarter of 2021 ASSIGNMENT #2 - Chapter 4 (Part 2) NAME (Last, First): (12 marks) Student No.: XYZ Company PRO FORMA Quarterly Income Statements Q1 02 Sales $165,000 Cost of goods sold 115.500 Gross profit 49,500 Operating expenses 138,000 Depreciation expense 131.250 Income before interest & taxes (219,750) Interest expense 25,000 Income before taxes (244.750) Income tax122.375 (expense)/recovery Net Income $122.375) PRO FORMA Quarterly Balance Sheets 01 92 Cash $815.500 Accounts receivable 110,000 Inventory 947.000 Plant & equipment 10.500,000 Accumulated depreciation 4.031.250 Total Assets $8 341.250 Accounts payable $125,000 Line of credit Interest payable 25.000 Taxes payable (122,375) Current portion of LT debt 200,000 Long-term debt 3.400,000 Common shares 1,800,000 Retained earnings 2.913.625 Total Liabilities & Sh. Equity 58 341.250 SHOW YOUR WORK: Q 1125 Question You have been provided with the 2020 financial statements of XYZ Inc.Y"XYZ") (reproduced below) and the following additional information fall amounts are in 2008): The demand for XYZ's products is highly seasonal, but the firm employs level production throughout the year because of its limited plant capacity Cost of goods sold is 70% of sales. Estimated costs of goods manufactured (COGM) for 2021 is 3,010. Due to level production, the value of goods produced each month is the same COGM = 430 . = 3,010 and Monthly production - 3.010 +12 = $250.833) Accounts payable, for the purchases of raw materials (RM"), are paid in the month following purchase and owing to level production, are constant at $125 at the end of each month Thus, purchases each month = JOURNAL ENTRIES: AP Raw Material Inventory 125 AP 125 Operating expenses are $46 per month Depreciation expense (on non-manufacturing assets) is calculated on a straight-line basis and equals $525 per year. All sales are on credit and accounts receivable are collected 2 months after the sale Bad debts are negligible XYZ wants to maintain a MINIMUM cash balance of $150 The company has a $1.000 line of credit available at the bank that is used for any cash deficiencies (as needed). Any excess cash over the minimum required will be used to reduce the line of credit, where applicable Income taxes are levied at a rate of 50 percent and are paid three months after the year-end (for the full year) Long-term debt repayments of $100 and interest payments of $50 are made at the end of June and December. For simplicity, ignore interest on the line of credit Annual dividends of $15 are declared and paid at the end of December XYZ Inc. Income Statement for the Year Ended December 31, 2020 fin000) Sales Cost of goods sold 2.904 Gross margin $1,245 Operating expenses 552 Depreciation expense 525 Income before interest and taxes $168 Interest expense 100 Income before taxes $68 Income tax expense 34 Net income $34 4-31 $4.149 200 21 XYZ Inc. Balance Sheet as at December 31, 2020 (in '000s) $150 1,750 310 $2,210 ASSETS Cash Accounts receivable L32 + Inventory Total current assets Property, plant and equipment ("PP&E) Less: Accumulated depreciation PP&E, net Total assets $10,500 3.900 6.600 $8.810 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Bank loan (line of credit) Interest payable Income tax payable (paid 3/13/2021 $125 215 0 34 200 $574 3.400 3,974 1.800 3.036 $8.810 Current portion of long-term debt Total current liabilities Long-term debt (net of current portion) Total liabilities Common shares (Capital stock) Retained earnings Total liabilities and shareholders' equity ACTUAL sales for 2020 (in '000s): November $820 December PROJECTED (estimated) sales for 2021 (in '000s): January $55 July February $55 August March $55 September April $55 M October May $60 November June December REQUIRED: $930 $80 $550 $690 $830 $850 $960 $60 200 Prepare Pro-Forma financial statements for the first quarter of 2021. Tem "HIGHLY SEASONAL". January to July Sales August to December Sales - 430 = 9.77% of yearly sales = 90.23% of yearly sales Total Sales $4.300 4-32 You have been provided with the 2020 financial statements of XYZ Inc. "XYZ") (reproduced The demand for XYZ's products is highly seasonal but the firm employs level production Cost of goods sold is 70% of sales. Estimated costs of goods manufactured (COGM) for 2021 is Question yo below) and the following additional information (all amounts are in "0008): throughout the year because of its limited plant capacity . 3,010. Due to level production, the value of goods produced each month is the same COGM = _430.70 Accounts payable for the purchases of raw materials ("RM"), are paid in the month = 3,010 and Monthly production = 3,010 +12 = $250.833) following purchase and owing to level production are constant at $125 at the end of each month Thus, purchases each month = JOURNAL ENTRIES: 125 Raw Material Inventory 125 AP 125 Operating expenses are $46 per month Depreciation expense (on non-manufacturing assets) is calculated on a straight-line basis and equals $525 per year. All sales are on credit and accounts receivable are collected 2 months after the sale. Bad debts are negligible XYZ wants to maintain a MINIMUM cash balance of $150 The company has a $1,000 line of credit available at the bank that is used for any cash deficiencies (as needed). Any excess cash over the minimum required will be used to reduce the line of credit where applicable Income taxes are levied at a rate of 50 percent and are paid three months after the year-end (for the full year) Long-term debt repayments of $100 and interest payments of $50 are made at the end of June and December. For simplicity, ignore interest on the line of credit. Annual dividends of $15 are declared and paid at the end of December XYZ Inc. Income Statement for the Year Ended December 31, 2020 (in '000s Sales Cost of goods sold 2904 Gross margin $1.245 Operating expenses 552 Depreciation expense 525 Income before interest and taxes $168 Interest expense 100 Income before taxes $68 Income tax expense Net income $34 4-31 $4.149, 007 34 Item XYZ Inc. Balance Sheet as at December 31, 2020 (in 000s) $150 1,750 310 $2,210 ASSETS Cash Accounts receivable Llo Inventory Total current assets Property, plant and equipment ("PP&E") Less: Accumulated depreciation PP&E, net Total assets $10,500 3.900 6.600 $8.810 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Bank loan (line of credit) Interest payable Income tax payable prid_341312021 Current portion of long-term debt Total current liabilities Long-term debt (net of current portion) Total liabilities Common shares (Capital stock) Retained earings Total liabilities and shareholders' equity $125 215 0 34 200 $574 3.400 3.974 1,800 3.036 $8.810 ACTUAL sales for 2020 (in 1000s): November $820 December $930 PROJECTED (estimated) sales for 2021 (in '000s): January $55 July February $55 August March $55 September $55 Atv April October $60 November May June December $80 $550 $690 $830 $850 $960 Is S60 200 REQUIRED: Prepare Pro-Forma financial statements for the first quarter of 2021 and "HIGHLY SEASONAL": January to July Sales 930 = 9.77% of yearly sales August to December Sales = 3890 = 90.23% of yearly sales Total Sales $4.300 4-32
