The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax...

 
 

Transcribed Image Text:

The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $769,000 Costs 625,000 Other expenses 32,000 Earnings before interest and taxes $ 112,000 Interest paid 16,400 Taxable income $ 95,600 Taxes (21%) 20,076 Net income $ 75,524 Dividends $22,040 Addition to retained 53,484 earnings CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities $ 25,840 Accounts payable Notes payable $ 63,800 19,400 Cash Accounts receivable 35,320 Inventory 71,960 Total $ 83,200 Total $ 133,120 Long-term debt $ 117,000 Owners' equity Common stock and paid-in surplus Fixed assets $ 112,000 Net plant and equipment $226,000 Retained earnings 46,920 Total $158,920 Total liabilities and owners' Total assets $ 359,120 $359,120 equity Complete the pro forma income statements below. (Input all answers as positive values. Do not round intermediate calculations.) Pro Forma Income Statement 20% Sales Growth 25% Sales Growth 30% Sales Growth Sales Costs Other expenses EBIT Interest paid Taxable income Taxes Net income Dividends Add to RE Calculate the EFN for 20, 25 and 30 percent growth rates. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) 20% 25% 30% EFN The most recent financial statements for Crosby, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $769,000 Costs 625,000 Other expenses 32,000 Earnings before interest and taxes $ 112,000 Interest paid 16,400 Taxable income $ 95,600 Taxes (21%) 20,076 Net income $ 75,524 Dividends $22,040 Addition to retained 53,484 earnings CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities $ 25,840 Accounts payable Notes payable $ 63,800 19,400 Cash Accounts receivable 35,320 Inventory 71,960 Total $ 83,200 Total $ 133,120 Long-term debt $ 117,000 Owners' equity Common stock and paid-in surplus Fixed assets $ 112,000 Net plant and equipment $226,000 Retained earnings 46,920 Total $158,920 Total liabilities and owners' Total assets $ 359,120 $359,120 equity Complete the pro forma income statements below. (Input all answers as positive values. Do not round intermediate calculations.) Pro Forma Income Statement 20% Sales Growth 25% Sales Growth 30% Sales Growth Sales Costs Other expenses EBIT Interest paid Taxable income Taxes Net income Dividends Add to RE Calculate the EFN for 20, 25 and 30 percent growth rates. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) 20% 25% 30% EFN

Answer rating: 100% (QA)

answer PRO FORMA INCOME STATEMENT 15Growth 20 25 Sales 1127874 1176912 1225950 Costs 911904 951552 991200 Other expenses 23069 24072 25075 EBIT 192901 ... View the full answer