(12-2 Noso Textile's 2005 financial statements are shown here: Noso TEXTILE: BALANCE SHEET AS OF DECEMBER...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(12-2 Noso Textile's 2005 financial statements are shown here: Noso TEXTILE: BALANCE SHEET AS OF DECEMBER 31, 2005 (S THOUSANDS) $ 1,080 6,480 9,000 Current assets S16,560 12,600 Cash Accounts payable Accruals Notes payable Current liabilities Long-term bonds Common stock Retained earnings Total liabilities and equity $29,160 $ 4,320 2,880 2,100 $ 9,300 3,500 Receivables Inventories Net fixed assets 3,500 12,860 Total assets $29, 160 Noso TEXTILE: INCOME STATEMENT POR DECEMBER 31, 2005 (S THOUSANDS) Sales $36,000 (32,440) $ 3,560 560) S 3,000 ( 1,200) $ 1,800 $ 810 $ 990 Operating costs Farnings before interest and taxes Interest Earnings before taxes Taxes (40%) Net Income Dividends (45%) Addition to retained earnings a. Suppose 2006 sales are projected to increase by 15 percent over 2005 sales. Determine the additional funds needed. Assume that the company was operating at full capacity in 2005, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Use the projected balance sheet method to develop a pro forma balance sheet and income statement for December 31, 2006. (Do not incorporate any financing feedback effects. Use the pro forma income statement to determine the addition to retained earnings.) (12-2 Noso Textile's 2005 financial statements are shown here: Noso TEXTILE: BALANCE SHEET AS OF DECEMBER 31, 2005 (S THOUSANDS) $ 1,080 6,480 9,000 Current assets S16,560 12,600 Cash Accounts payable Accruals Notes payable Current liabilities Long-term bonds Common stock Retained earnings Total liabilities and equity $29,160 $ 4,320 2,880 2,100 $ 9,300 3,500 Receivables Inventories Net fixed assets 3,500 12,860 Total assets $29, 160 Noso TEXTILE: INCOME STATEMENT POR DECEMBER 31, 2005 (S THOUSANDS) Sales $36,000 (32,440) $ 3,560 560) S 3,000 ( 1,200) $ 1,800 $ 810 $ 990 Operating costs Farnings before interest and taxes Interest Earnings before taxes Taxes (40%) Net Income Dividends (45%) Addition to retained earnings a. Suppose 2006 sales are projected to increase by 15 percent over 2005 sales. Determine the additional funds needed. Assume that the company was operating at full capacity in 2005, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Use the projected balance sheet method to develop a pro forma balance sheet and income statement for December 31, 2006. (Do not incorporate any financing feedback effects. Use the pro forma income statement to determine the addition to retained earnings.)
Expert Answer:
Answer rating: 100% (QA)
2005 2006 Cash 1080 1242 Receivables 6480 7452 Inventories 9000 10350 Current Assets 16560 19044 Net ... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078025778
17th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
Students also viewed these accounting questions
-
CITY OF MONROE General Fund Balance Sheet As of December 31, 2013 Assets Cash $502,000 Taxes receivable $210,000 Less: Estimated uncollectible taxes (42,000) net 168,000 Interest and penalties...
-
As of December 31 of the current year, Petersen Corporation has prepared the following information regarding its liabilities and other obligations: Notes payable, of which $12,000 will be repaid...
-
As of December 31 of the current year, Alexander Company has prepared the following information regarding its liabilities and other obligations: Notes payable, of which $27,000 will be repaid within...
-
At the beginning of Section 12.6, it was noted that given the CBC MAC of a oneblock message \(X\), say \(T=\operatorname{MAC}(K, X)\), the adversary immediately knows the CBC MAC for the two-block...
-
The operating speed range of a certain motor is from 1500 to 3000 rpm. The motor and its mount vibrate excessively at 2100 rpm. When a vibration absorber weighing 5 lb and tuned to 2100 rpm was...
-
Find I1, I2 and V1 in the circuit in figure. 3 A V1 402 60 w-
-
Do the following activities to complete your marketing plan: 1. Draw a simple organizational chart for your organization. 2. Develop a Gantt chart (see Chapter 2) to schedule the key activities...
-
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy Fish prepared the following...
-
Calculate Inventory Conversion Period, Receivables Conversion Period, the Payment Conversion Period, and the Operating Cycle for Innovation Inc. given the following information. Use 365 to get an...
-
The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at...
-
6.20 For the gear train shown in the figure, find the required input power and speed of the 18 tooth spur pinion (magnitude and direction of rotation) knowing that the required output torque is 3...
-
1. Show the output of the following program: #include using namespace std; int mystery (int); int main() { int n; for (n = 1; n
-
explain how organizations can apply the kotters model as a theory to managing social change
-
Nicholas owns stock in Belvidere Corporation he purchased three years ago. Nicholas sells the shares to his sister, Naomi, in the current year resulting in a realized loss to Nicholas. Number of...
-
You are given the task of reading n numbers and then printing them out in sorted order. Suppose you have access to a balanced dictionary data structure, which supports the operations search, insert,...
-
Consider the following game Player 1 T M B E 4,4 2,0 3,0 Player 2 N 0, 2 2, 2 1,0 a) Find the the pure-strategy Nash equilibria b) Find a mixed-strategy Nash equilibria in which Player 1 plays all...
-
Consider two symbols, A and B, with the probability of occurrence of 0.8 and 0.2, respectively. The coding efficiency can be improved by combining N symbols at a time (called "symbol blocking"). Say...
-
Refer to Example 9.15. Add the following functionality to this program: Allow the user to enter the cost of a gallon of gas on each trip and use a function, Cost() to calculate the cost of purchasing...
-
The U.S. government maintains an Internet site containing information on various countries called The World Factbook. The site includes a database under the countries and regions tab. Use the data or...
-
Assume you have recently completed your college degree with a major in accounting and have accepted a position on the accounting staff of a large corporation. Your supervisor suggests that in...
-
The financial statements of large public companies are often accompanied by a multiple-year summary of key financial and other information that is helpful in understanding the company. Appendix A of...
-
Company data for dividend per share (DPS), earnings per share (EPS), share price, and price-to-earnings ratio (P/E) for the most recent five years are presented in Exhibit 10-9. In addition,...
-
The best model to use when valuing a young dividend-paying company that is just entering the growth phase is most likely the: A. Gordon growth model. B. Two-stage dividend discount model. C....
-
For the next three years, the annual dividends of a stock are expected to be 2.00, 2.10, and 2.20. The stock price is expected to be h20.00 at the end of three years. If the required rate of return...
Study smarter with the SolutionInn App