Sakiwayo, the CFO of Homalco Ltd., is preparing the earnings projection for Quarter 1. The company...
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Sakiwayo, the CFO of Homalco Ltd., is preparing the earnings projection for Quarter 1. The company has a December 31 year end. She has gathered the following information related to the assumptions for the first quarter projections: Item Sales Cost of goods sold - Selling and administration - wages Selling and administration other expenses Interest expense - Annual depreciation expense New capital asset purchases Dividends paid Assumption $1,760,000 40% of sales $230,000 $185,000 10% annual interest, payable quarterly. Interest is paid quarterly, calculated on the loan balance outstanding at the end of the previous quarter. 30% of opening capital asset balance and 15% of any purchases made during the year $450,000 $360,000 The bank loan balance and capital asset balance as at December 31 were $600,000 and $500,000, respectively. The company has an income tax rate of 28%. Assuming that depreciation is equal to CCA, what is the pro forma net income for Quarter 1? Sakiwayo, the CFO of Homalco Ltd., is preparing the earnings projection for Quarter 1. The company has a December 31 year end. She has gathered the following information related to the assumptions for the first quarter projections: Item Sales Cost of goods sold - Selling and administration - wages Selling and administration other expenses Interest expense - Annual depreciation expense New capital asset purchases Dividends paid Assumption $1,760,000 40% of sales $230,000 $185,000 10% annual interest, payable quarterly. Interest is paid quarterly, calculated on the loan balance outstanding at the end of the previous quarter. 30% of opening capital asset balance and 15% of any purchases made during the year $450,000 $360,000 The bank loan balance and capital asset balance as at December 31 were $600,000 and $500,000, respectively. The company has an income tax rate of 28%. Assuming that depreciation is equal to CCA, what is the pro forma net income for Quarter 1?
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Pro forma net income for Quarter 1 Sales Cost of goods sold Selling and administration wages Sell... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
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