Problem 3-5Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next.Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($ thousands)INCOME STATEMENTSalesCost of goods soldOperating expenseDepreciationexpenseInterest expenseEarnings before taxTaxNet incomeActual2021Current assetsNet fixed assetsTotal assetsCurrent liabilitiesLong-term debtOwner's equityTotal liabilities & equity$ 7,5005,80070025090660231$ 429Forecast2022$ 7,9006,100700260120720252$ 468Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($ thousands)BALANCE SHEETActual2021$ 3,8003,000$ 6,800$ 1,1507004,950$ 6,800Forecast2022$ 4,050$ 1,270500a. Assume that Universal plans to purchase $700,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022.What would be its forecast for net fixed assets in 2022?20b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equityduring 2022. What would be its forecast for owner's equity in 2022?c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022?Net fixed assets in 2022Owner's equity in 2022External funding required for 2022Next

Fixed assets are observable, durable assets that a business uses in its operations, such as…

Problem 3-5 Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Current assets Net fixed assets Actual 2021 Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity $ 7,500 5,800 700 250 90 660 231 $429 Forecast 2022 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($ thousands) BALANCE SHEET $ 7,900 6,100 700 260 Actual 2021 120 720 252 $ 468 3,800 3,000 $ 6,800 $1,150 700 4,950 $ 6,800 Forecast 2022 $ 4,050 $ 1,270 500 a. Assume that Universal plans to purchase $700,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022. What would be its forecast for net fixed assets in 2022? b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equity during 2022. What would be its forecast for owner's equity in 2022? c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022? Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter13: Tax Credits And Payment Procedures

Section: Chapter Questions

Problem 25P: LO.2 Oak Corporation has the following general business credit carryovers. If the general business...