Major Manuscripts, Inc.

 Income Statement for 2012

Net sales	$ 7,800
Cost of goods sold	6,865
Depreciation	210
Earnings before interest and taxes	$ 725
Interest paid	31
Taxable Income	$ 694
Taxes	284
Net income	$ 410
Dividends	$ 187

Major Manuscripts, Inc.

2012 Balance Sheet

	2012		2012
Cash	$ 2,400	Accounts payable	$ 1,550
Accounts receivable	880	Long-term debt	300
Inventory	2,700	Common stock	$ 3,100
Total	$ 5,980	Retained earnings	4,430
Net fixed assets	3,400
Total assets	$ 9,380	Total liabilities & equity	$ 9,380

Major Manuscripts, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant.

In 2013, no new equity will be raised and sales are projected to increase by 10 percent.

Construct the proformas for 2013 and answer the following questions.

Projected total assets= $

Projected retained earnings= $

Additional new debt required= $

Answer rating: 100% (QA)

To construct the proformas for 2013 we need to calculate the projected values based on the given information and assumptions Lets calculate the profor... View the full answer