The following data is from the Chameleon Group Pro-forma budget assumptions for the year ended November 30,
Question:
The following data is from the Chameleon Group Pro-forma budget assumptions for the year ended November 30, 2021, and is to be used to develop their Pro-forma financial statements. The firm produces various forms of flavored drinks for several small independent companies. Revenues are forecast to be $68,000,000 for the next fiscal year. The effective tax rate is 21%. You have been asked to create a Balance Sheet and a Statement of Income and Retained Earnings using the following:
Capital Assets (net)……………………............. 5.4 times Accounts Receivable
Selling and general expenses……................... 22% of Revenues
Retained Earnings Opening…………............... $17.947,979
Total Equity % of Total Assets…….................. 42%
Current Ratio…………………............................ 2:1
Amortization…………………………………….. 15% of Capital Assets
Inventory days on hand…………….................. 150 days
Average collection period……………............... 60 days
Gross Profit Margin………………..................... 53%
Share Capital .................................................. 40% of Shareholder Equity
Total Assets..................................................... 1.4 times Revenue
Taxes payable as % of expense....................... 80%
Accounts payable............................................. To Be Determined
Retained Earnings Ending............................... To Be Determined
Share Capital…………………………............... To Be Determined
Long-term Debt – 4.5%. ................................. To Be Determined
Cash…………………………………….............. To Be Determined
Dividends………………………………….. ……. To Be Determined
Assume a 360 day year
Prepare your Balance Sheet Statement of Income and Retained Earnings based on the information provided above.
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak