The 2019 Income Statement and Balance Sheet are given below for Van Buren Enterprises. Using the assumptions
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The 2019 Income Statement and Balance Sheet are given below for Van Buren Enterprises. Using the assumptions provided, create the 2020 Pro Forma Income Statement and Balance Sheet. What is the External Funding Required? | ||||||||||
Van Buren Enterprises | . | Van Buren Enterprises | ||||||||
Income Statement ($ thousands) | Balance Sheets | |||||||||
Year Ended December 31st, 2019 | Year Ended December 31st, 2019 ($ thousands) | |||||||||
2019 Actual | ||||||||||
Net Sales | $ 9,870 | 2019 Actual | 2019 Actual | |||||||
Cost of Goods Sold | 8,093 | Current Assets | Current Liabilities | |||||||
Gross Profit | $ 1,777 | Cash and Securities | $ 540 | Accounts Payable | $ 843 | |||||
Accounts Receivable | 1,485 | Accured Wages | 48 | |||||||
Operating Expenses | 986 | Inventory | 810 | Total | $ 891 | |||||
Depreciation Expense | 182 | Total | $ 2,835 | |||||||
Operating Income (EBIT) | $ 609 | Long-Term Debt | $ 1,600 | |||||||
Interest Expense | 83 | Net Fixed Assets | $ 850 | Owner's Equity | ||||||
Taxable Income | $ 526 | Common Stock | $ 200 | |||||||
Retained Earnings | 994 | |||||||||
Income Tax Expense | 110 | Total | $ 1,194 | |||||||
Net Income | $ 416 | Total Assets | $ 3,685 | Total Liabilities and Owners' Equity | $ 3,685 | |||||
Van Buren Enterprises Assumptions for 2020 | ||||||||||
Growth rate in Net Sales | 30% | Long-Term Debt ($ estimate) | $ 1,400 | |||||||
Cost of Goods Sold (% of Sales) | 82% | Cash/Securities (Days of Sales) | 20 | |||||||
Operating Expenses (% of Sales) | 10% | Accounts Receivable (% of Sales) | 15% | |||||||
Depreciation Expense (estimate $) | $ 192 | Inventory Turnover | 10 | |||||||
Interest Expense (Total estimate $) | $ 159 | Accounts Payable Period (Days) | 38 | |||||||
Tax Rate | 21% | Accrued Wages ($ estimate) | $ 63 | |||||||
Dividend Payout Ratio | 50% | Net Fixed Assets ($ estimate) | $ 950 | |||||||
Assume the Interest Expense estimate includes the cost of any new debt required, and Common Stock will not change. Create the 2020 Pro Forma Balance Sheet and Income Statements. What is the External Funding Required? |
Related Book For
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina
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