Prepare a pro forma income statement for the year ended May 31, 2019 Prepare a pro...

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Prepare a pro forma income statement for the year ended May 31, 2019 Prepare a pro forma statement of retained earnings for the year ended May 31, 2019 Prepare a pro forma balance sheet as at May 31, 2019 1. The forecast sales for the year are $1,600,000 and the gross profit is expected to be 30% of sales. Eighty percent al all sales are on credit. At present the average collection period is six weeks but it is likely that this will change to eight weeks in the forthcoming year 2. At the year-end, inventory is expected to be 40% higher than the beginning of the year. 3. During the year the company intends to pay $45,000 for a fleet of delivery vans. 4. Administration expenses for the year are expected to be $300,000 (including $12,000 for amortization of buildings and $38,000 for amortization of furniture and fixtures). Selling expenses are expected to be $95,000 (including $10,000 for amortization of delivery vans). 5. All purchases are on credit. It has been estimated that the average payment period taken will be 12 weeks during the forthcoming year. 6. Income taxes for the year are expected to be 34,000. Half of this will be paid during the year and the remaining half will be outstanding at year-end. 7. Dividends declared and paid for the year are expected to be $0.06 per share. 8. There are 500,000 shares out standing Choice Designs Limited Balance Sheet As at May 31, 2018 (in $ thousands) Current assets Cash 165 Accounts receivable 220 Inventory 240 Total current assets 625 Property, plant, and equipment, net Land 150 Buildings 450 Less:Accumulated amortization 100 350 Furniture and fixtures 140 Less:Accumulated amortization 80 60 Total property, plant and equipment 560 Total assets 1185 Current liabilities Accounts payable Income taxes payable Total current liabilities Shareholders' equity Common shares 268 166 434 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 500 251 751 1185 Prepare a pro forma income statement for the year ended May 31, 2019 Prepare a pro forma statement of retained earnings for the year ended May 31, 2019 Prepare a pro forma balance sheet as at May 31, 2019 1. The forecast sales for the year are $1,600,000 and the gross profit is expected to be 30% of sales. Eighty percent al all sales are on credit. At present the average collection period is six weeks but it is likely that this will change to eight weeks in the forthcoming year 2. At the year-end, inventory is expected to be 40% higher than the beginning of the year. 3. During the year the company intends to pay $45,000 for a fleet of delivery vans. 4. Administration expenses for the year are expected to be $300,000 (including $12,000 for amortization of buildings and $38,000 for amortization of furniture and fixtures). Selling expenses are expected to be $95,000 (including $10,000 for amortization of delivery vans). 5. All purchases are on credit. It has been estimated that the average payment period taken will be 12 weeks during the forthcoming year. 6. Income taxes for the year are expected to be 34,000. Half of this will be paid during the year and the remaining half will be outstanding at year-end. 7. Dividends declared and paid for the year are expected to be $0.06 per share. 8. There are 500,000 shares out standing Choice Designs Limited Balance Sheet As at May 31, 2018 (in $ thousands) Current assets Cash 165 Accounts receivable 220 Inventory 240 Total current assets 625 Property, plant, and equipment, net Land 150 Buildings 450 Less:Accumulated amortization 100 350 Furniture and fixtures 140 Less:Accumulated amortization 80 60 Total property, plant and equipment 560 Total assets 1185 Current liabilities Accounts payable Income taxes payable Total current liabilities Shareholders' equity Common shares 268 166 434 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 500 251 751 1185