Question 19 (1 point)

A financial manager at General Talc Mines has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning purposes for the coming year ended December 31, 2015 using the percent-of-sales method and the following financial data: The firm estimates sales of $1,000,000. The firm maintains a cash balance of $25,000. Accounts receivable represents 15 percent of sales. Inventory represents 35 percent of sales. A new piece of mining equipment costing $150,000 will be purchased in 2015. Total depreciation for 2010 will be $75,000. Accounts payable represents 10 percent of sales. There will be no change in notes payable, accruals, and common stock. The firm plans to retire a long term note of $100,000. Dividends of $45,000 will be paid in 2015. The firm predicts a 4 percent net profit margin. Balance Sheet General Talc Mines December 31, 2014 The pro forma net fixed assets amount is ________.

Question 19 options:

1)

$500,000

2)

$575,000

3)

$600,000

4)

$650,000