Problem $2$: Creating Proforma Financial Statements $10$ Points

The $2019$ Income Statement and Balance Sheet are given below for Van Buren Enterprises. Using the assumptions provided, create the $2020$ Pro Forma Income Statement and Balance Sheet. What is the External Funding Required?

Van Buren Enterprises $.$ Van Buren Enterprises

Income Statement $($$ thousands$)$ Balance Sheets

Year Ended December $31$st$,2019$ Year Ended December $31$st$,2019($$ thousands$)$

$2019$ Actual

Net Sales $$9,8702019$ Actual $2019$ Actual

Cost of Goods Sold $8,093$ Current Assets Current Liabilities

Gross Profit $$1,777$ Cash and Securities $$540$ Accounts Payable $$843$

Accounts Receivable $1,485$ Accured Wages $48$

Operating Expenses $986$ Inventory $810$ Total $$891$

Depreciation Expense $182$ Total $$2,835$

Operating Income $($EBIT$)$ $$609$ Long$-$Term Debt $$1,600$

Interest Expense $83$ Net Fixed Assets $$850$ Owner's Equity

Taxable Income $$526$ Common Stock $$200$

Retained Earnings $994$

Income Tax Expense $110$ Total $$1,194$

Net Income $$416$ Total Assets $$3,685$ "Total Liabilities and

Owners' Equity" $$3,685$

Van Buren Enterprises Assumptions for $2020$

Growth rate in Net Sales $30\%$ Long$-$Term Debt $($$ estimate$)$ $$1,400$

Cost of Goods Sold $(\%$ of Sales$)82\%$ Cash$/$Securities $($Days of Sales$)20$

Operating Expenses $(\%$ of Sales$)10\%$ Accounts Receivable $(\%$ of Sales$)15\%$

Depreciation Expense $($estimate $$)$ $$192$ Inventory Turnover $10$

Interest Expense $($Total estimate $$)$ $$159$ Accounts Payable Period $($Days$)38$

Tax Rate $21\%$ Accrued Wages $($$ estimate$)$ $$63$

Dividend Payout Ratio $50\%$ Net Fixed Assets $($$ estimate$)$ $$950$

Assume the Interest Expense estimate includes the cost of any new debt required, and Common Stock will not change. Create the $2020$ Pro Forma Balance Sheet and Income Statements. What is the External Funding Required?