FIN 310 Chapter 5 Open-Ended Assignment Note: Please put your answers only in the section below the Bold Red sentence at the end of the Required section below. ABC Corporation published the following information in its financial statements for its 2020 annual report: ABC Corporation Income Statement For the Year ended Dec 31, 2020 80,000 50,000 30,000 9,000 3,000 Sales Cost of goods sold Gross profit Cash operating expenses Depreciation Total operating expenses Earnings before interest and taxes Interest expense Earnings before taxes Income tax expense Net income 12,000 18,000 720 17.280 5,357 11.923 ABC Corporation Balance Sheet Dec 31, 2020 Cash Short-term investments Accounts receivable Inventory Fixed assets, net Total assets 9,000 5,000 12,000 10,000 24,000 60,000 - Accounts payable Accrued liabilities Bonds payable Common stock Retained earnings 8,000 3,000 12,000 22,000 15,000 Total liabilities & equity 50,000 Additional Information 1. Sales in 2021 are estimated to be $104,000. 2. Cost of goods sold are considered to be variable costs. 3. $5,000 of the cash operating expenses for 2020 are considered variable costs, and the remainder are fixed costs 4. Depreciation is, of course, considered to be a fixed cost. 5. Cash, accounts receivable, inventories, accounts payable, and accrued payables are considered to be spontaneous items 6. Short-term investments, net fixed assets, bonds payable, and common stock are discretionary 7. $5,000 of bonds payable at the end of 2020 are considered current liabilities," and will be repaid on January 1, 2021. The interest rate on the bonds for 2021 will remain the same as it was in 2020 8. The company will purchase fixed assets of $3,600 in 2001, but overall depreciation for 2021 will remain the same dollar amount as it was for 2020, 9. The firm paid a dividend of $4.000 in 2020, and will maintain its 2020 dividend payout ratio for 2021 10. The income tax rate for 2021 is expected to be the same as it was in 2020 Required: A. Prepare the 2021 pro-forma Income statement for ABC Corporation B. Prepare the 2021 pro-forma balance sheet for ABC Corporation Your answers to this open-ended assignment shoulc be placed in the space below this line. ABC Corporation Proforma Income Statement For the Year ended Dec 31, 2021 Sales Cost of goods sold Gross profit Cash operating expenses Depreciation Total operating expenses Earnings before interest and taxes Interest expense Earnings before taxes Income tax expense Net income B ABC Corporation Pro-forma Balance Sheet Dec 31, 2021 Cash Short-term Investments Accounts receivable Inventory Fixed assets, net Total assets Accounts payable Accrued liabilities Bonds payable External financing needs Common stock Retained earnings Total liabilities & equity