Consider the following simplified financial statements for the Steveston Corporation (assuming no income taxes):

Statement of Comprehensive Income				Statement of Financial Position
Sales	$	32,000		Assets	$	25,300		Debt	$	5,800
Costs		24,400						Equity		19,500
Net income	$	7,600		Total	$	25,300		Total	$	25,300

Steveston has predicted a sales increase of 15 percent. Assume Steveston pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.

  

Prepare the pro forma statements. (Input all amounts as positive values.)

Pro forma Statement of Comprehensive Income			Pro forma Statement of Financial Position
Sales	$		Assets	$		Debt	$
Costs						Equity
Net income	$		Total	$		Total	$

Determine the external financing needed. (Negative amount should be indicated by a minus sign.)

External financing needed

$

Answer rating: 100% (QA)

To prepare the pro forma statements we first need to calculate the values for the projected sales co... View the full answer