Pro Forma Income Statement and Balance Sheet Below is the income statement and balance sheet for Blue Bill Corporation for 2013 Based on the historical statements and the additional information provided, construct the firm's pro forma income statement and balance sheet for 2014 Blue Bill Corporation Income Statement For the year ended 2013 Projected 2012 2013 2014 Revenue $60,000 $63,000 Cost of goods sold 42,000 44,100 Gross margin 18,000 18,900 SG A expense 6,000 6,300 Depreciation expense 1,800 2,000 2,200 Earnings Before Interest and Taxes (EBIT) 10,200 10,600 Interest expense 1,500 1,800 1,900 Taxable income 8,700 8,800 Income Tax Expense 3,045 3,080 Net income 5,655 5,720 Dividends 750 800 850 To retained earnings $4,905 $4,920 Additional income statement information Sales will increase by 5 in 2014 from 2013 levels COGS and SG A will be the average percent of sales for the last 2 years Depreciation expense will increase to $2,200 Interest expense will be $1,900 The tax rate is 35 Dividend payout will increase to $850 Blue Bill Corporation Balance Sheet December 31, 2013 Projected 2013 2014 Current assets Cash $8,000 Accounts receivable 3,150 Inventory 9,450 Total current assets 20,600 Property, plant, and equipment (PP E) 28,500 Accumulated depreciation 16,400 Net PP E 12,100 Total assets $32,700 Current liabilites Accounts payable $3,780 Bank loan (10 ) 3,200 Other current liabilities 1,250 Total current liabilities 8,230 Long term debt (12 ) 4,800 Common stock 1,250 Retained earnings 18,420 Total liabilities and equity $32,700 Additional balance sheet information The minimum cash balance is 12 of sales Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013 $8,350 of new PP E will be purchased in 2014 Other current liabilities will be 3 of sales in 2014 There will be no changes in the common stock or long term debt accounts The plug figure (the last number entered that makes the balance sheet balance) is bank loan

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Pro Forma Income Statement and Balance Sheet Below is the income statement and balance sheet for Blue Bill Corporation for 2013  Based on the historical statements and the additional information provided, construct the firm's pro forma income statement and balance sheet for 2014  Blue Bill Corporation Income Statement For the year ended 2013 Projected 2012 2013 2014 Revenue $60,000 $63,000 Cost of goods sold 42,000 44,100 Gross margin 18,000 18,900 SG A expense 6,000 6,300 Depreciation expense 1,800 2,000 2,200 Earnings Before Interest and Taxes (EBIT) 10,200 10,600 Interest expense 1,500 1,800 1,900 Taxable income 8,700 8,800 Income Tax Expense 3,045 3,080 Net income 5,655 5,720 Dividends 750 800 850 To retained earnings $4,905 $4,920 Additional income statement information  Sales will increase by 5  in 2014 from 2013 levels  COGS and SG A will be the average percent of sales for the last 2 years  Depreciation expense will increase to $2,200  Interest expense will be $1,900  The tax rate is 35   Dividend payout will increase to $850  Blue Bill Corporation Balance Sheet December 31, 2013 Projected 2013 2014 Current assets Cash $8,000 Accounts receivable 3,150 Inventory 9,450 Total current assets 20,600 Property, plant, and equipment (PP E) 28,500 Accumulated depreciation 16,400 Net PP E 12,100 Total assets $32,700 Current liabilites Accounts payable $3,780 Bank loan (10 ) 3,200 Other current liabilities 1,250 Total current liabilities 8,230 Long term debt (12 ) 4,800 Common stock 1,250 Retained earnings 18,420 Total liabilities and equity $32,700 Additional balance sheet information  The minimum cash balance is 12  of sales  Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013  $8,350 of new PP E will be purchased in 2014  Other current liabilities will be 3  of sales in 2014  There will be no changes in the common stock or long term debt accounts  The plug figure (the last number entered that makes the balance sheet balance) is bank loan

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Question: Pro Forma Income Statement and Balance Sheet Below is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical

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Pro Forma Income Statement and Balance Sheet


Below is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical statements and the
additional information provided, construct the firm's pro forma income statement and balance sheet for 2014.


Blue Bill Corporation
Income Statement
For the year ended 2013			Projected
	2012	2013	2014
Revenue	$60,000	$63,000
Cost of goods sold	42,000	44,100
Gross margin	18,000	18,900
SG&A expense	6,000	6,300
Depreciation expense	1,800	2,000	2,200
Earnings Before Interest and Taxes (EBIT)	10,200	10,600
Interest expense	1,500	1,800	1,900
Taxable income	8,700	8,800
Income Tax Expense	3,045	3,080
Net income	5,655	5,720
Dividends	750	800	850
To retained earnings	$4,905	$4,920

Additional income statement information:
Sales will increase by 5% in 2014 from 2013 levels.
COGS and SG&A will be the average percent of sales for the last 2 years.
Depreciation expense will increase to $2,200.
Interest expense will be $1,900.
The tax rate is 35%.
Dividend payout will increase to $850.




Blue Bill Corporation
Balance Sheet
December 31, 2013			Projected
	2013		2014
Current assets
Cash	$8,000
Accounts receivable	3,150
Inventory	9,450
Total current assets	20,600
Property, plant, and equipment (PP&E)	28,500
Accumulated depreciation	16,400
Net PP&E	12,100
Total assets	$32,700

Current liabilites
Accounts payable	$3,780
Bank loan (10%)	3,200
Other current liabilities	1,250
Total current liabilities	8,230
Long-term debt (12%)	4,800
Common stock	1,250
Retained earnings	18,420
Total liabilities and equity	$32,700

Additional balance sheet information:
The minimum cash balance is 12% of sales.
Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013.
$8,350 of new PP&E will be purchased in 2014.
Other current liabilities will be 3% of sales in 2014.
There will be no changes in the common stock or long-term debt accounts.
The plug figure (the last number entered that makes the balance sheet balance) is bank loan.