method based on Year 2019 figures, and make the following assumptions: Use the percent of sales...

 

Transcribed Image Text:

method based on Year 2019 figures, and make the following assumptions: Use the percent of sales 1. Depreciation rate is equal to 7%. 2. The historical average growth CAPEX ratio is 50% of change in sales. 3. Dividends are zero in Year 2020. 4. Total Debt (Long-term debt) is the plug variable. Use the financial statements of Waterloo Manufacturing Corporation to answer the questions that follow. Some of the forecasted values are already calculated for you. (8) Income Statement Revenues Operating Expenses SG&A Depreciation Interest Income Before Tax Income Tax Net Income 2018 Real 292,367 139,923 37,091 38,673 30,327 46,353 12,678 33,675 2019 069.212 Forecasted 2020 (3 349,536 195,593 39,369 28,883 880,322 (EE P 13,262 (0 72,429 (d 14,486 57,943 307,592 TB 916 65 67,559 Istot at jedW Balance Sheet Total Current Assets PP&E Total Assets Total Current Liabilities Total Debt Total Liabilities Common Stock Retained Earnings Total Equity 35,055 313,285 348,340 58,864 179,565 238,429 202,000 (92,089) 109,911 39,405 319,162 358,567 72,256 125,157 197,413 202,000 (40,846) 161,154 34,676 319,162 353,838 63,585 202,000 Questions: 10. What is depreciation expense in 2020? 11. What is the interest expense in 2020? 12. What are the retained earnings for 2020? 13. What is the total debt (long-term debt) in 2020? W method based on Year 2019 figures, and make the following assumptions: Use the percent of sales 1. Depreciation rate is equal to 7%. 2. The historical average growth CAPEX ratio is 50% of change in sales. 3. Dividends are zero in Year 2020. 4. Total Debt (Long-term debt) is the plug variable. Use the financial statements of Waterloo Manufacturing Corporation to answer the questions that follow. Some of the forecasted values are already calculated for you. (8) Income Statement Revenues Operating Expenses SG&A Depreciation Interest Income Before Tax Income Tax Net Income 2018 Real 292,367 139,923 37,091 38,673 30,327 46,353 12,678 33,675 2019 069.212 Forecasted 2020 (3 349,536 195,593 39,369 28,883 880,322 (EE P 13,262 (0 72,429 (d 14,486 57,943 307,592 TB 916 65 67,559 Istot at jedW Balance Sheet Total Current Assets PP&E Total Assets Total Current Liabilities Total Debt Total Liabilities Common Stock Retained Earnings Total Equity 35,055 313,285 348,340 58,864 179,565 238,429 202,000 (92,089) 109,911 39,405 319,162 358,567 72,256 125,157 197,413 202,000 (40,846) 161,154 34,676 319,162 353,838 63,585 202,000 Questions: 10. What is depreciation expense in 2020? 11. What is the interest expense in 2020? 12. What are the retained earnings for 2020? 13. What is the total debt (long-term debt) in 2020? W

Answer rating: 100% (QA)

To calculate the required values we need to make the following assumptions 1 Depreciation rate is eq... View the full answer