Charles and Company has begun selling a new pie recipe and they want you to help them
Question:
Charles and Company has begun selling a new pie recipe and they want you to help them with next year's budgeted financial statements.Using the worksheet below, complete Charles and Company forecast and answer the questions which follow.
Assumptions:
To begin with, Charles and Company is sure sales will grow 50% next year. Assume that is true. Then assume that COGS, Current Assets, and Current Liabilities all vary directly with Sales (that means if sales grows a certain percentage, then the account in question will grow by that same percentage). Assume that fixed expenses will remain unchanged and that $8,000 worth of new Fixed Assets will be obtained next year. Long term debt and common stock accounts remain unchanged. Lastly, the current dividend policy will be continued next year.
Charles and Company
Financial Forecast
Estimated
This year for next year
Sales $85,000
COGS 35,000
Gross Profit 40,000
Fixed Expenses 3,000
BeforeTax Profit 37,000
Tax @ 33.3333% 12,332
Net Profit 24,668
Dividends $0 _______
Current Assets $40,000
Net Fixed Assets 20,000
Total Assets $50,000 ________
Current Liabilities $18,000
Longterm debt 3,000
Common Stock 9,000
Retained Earnings 13,000
Total Liabs & Eq $43,000
Amount need to balance the balance sheet _________
(Projected total assets minus projected liabilities)
Methods of IT Project Management
ISBN: 978-1557536631
2nd edition
Authors: Jeffrey Brewer, Kevin Dittman