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The firm has estimated that its sales for 2 0 1 3 will be $ 8 4 6 , 7 5 6 Cash dividends to

The firm has estimated that its sales for 2013 will be $846,756
Cash dividends to be paid by the firm in 2013 $37,720
Minimum cash balance to be maintained by the firm $28,515
Accounts receivable percentage of sales 18%
The firm's ending inventory will change directly with changes in sales in 2013
A new machine purchased in 2013 will cost $41,679
Total depreciation for 2013 will be $17,000
Accounts payable will change directly in response to changes in sales in 2013
Taxes payable will equal one-fourth of the tax expense on the pro forma income statement
Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged.
Tenley Inc. Tenley Inc.
Income Statement Balance Sheet
For the year ended December 31,2012 December 31,2012
Sales revenue $800,000 Assets Liabilities and Stockholder's Equity
Less: Cost of goods sold 600,000 Cash $32,000 Accounts payable $100,000
Gross profits $200,000 Marketable securities 18,000 Taxes payable 20,000
Less: Operating expenses 100,000 Accounts receivable 150,000 Other current liabilities 5,000
Net profit before taxes $100,000 Inventories 100,000 Total current liabilities $125,000
Less: Taxes (rate=40%)40,000 Total current assets $300,000 Long-term debt 200,000
Net profit after taxes $60,000 Net fixed assets 350,000 Total liabilities $325,000
Total assets $650,000 Common stock 150,000
Less: Cash dividends 20,000 Retained earnings 175,000
To retained earnings $40,000 Total liabilities and stockholder's equity $650,000
Prepare a pro-forma income statement for the year ended December 31,2013, using the percent-of-sales method.

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ProForma Income Statement for Tenley Inc Year Ended December 31 2013 PercentofSales Method Sales Revenue 8467560 Less Cost of Goods Sold Estimated as of Sales Historical Cost of Goods Sold Sales 2012 ... blur-text-image
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