Han Company wishes to forecast its net income for the year 2009. In addition, for planning purposes
Question:
Han Company wishes to forecast its net income for the year 2009. In addition, for planning purposes Fritz intends to construct a forecasted statement of cash flows for 2009. Fritz has assembled balance sheet and income statement data for 2008 and has forecast a balance sheet for 2009. In addition, Fritz has estimated that its sales in 2009 will rise to $2,200 and does not anticipate paying any dividends in the coming year. This information is summarized here.
Instructions:
1. Prepare a forecasted income statement for 2009.Clearly state what assumptions you make.
2. Prepare a forecasted statement of cash flows for 2009. Use the indirect method of reporting cash from operating activities.
Balance Sheet 2008 2009 Forecasted Other current assets 550 Property, plant, and equipment, net $1,120 200 320 $1,120 $1,372 Accounts payable Bank loans payable Total stockholders equity Total liabilities and stockholders 220 $1,372 Income Statement 2008 2009 Forecasted $2,000 $2.200 Cost of goods sold Gross profit Depreciation expense Other operating expenses.. Operating profit Interest expense Income before income taxes.. Income taxes Net income $1.300 .010 $170 80 $ 50
Step by Step Answer:
1 2 Cash flows from operating activities Net income 52 Adjustments Depreciation 160 Increase in other current assets 50 Increase in accounts payable 2...View the full answer
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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