FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Using the given information, create a pro forma balance sheet. Covering all Assets and Liabilities listed within both photos.

Pro forma balance sheet Peabody & Peabody has 2019 sales of $10.6 million. It wishes to analyze expected performance and financing needs for 2021-2 years ahead. Given the following information, respond to parts a. and b.
(1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable; 12.3%, Inventory: 17.6%, Accounts payable, 13.9%; Net profit margin, 2.7%.
(2) Marketable securities and other current liabilities are expected to remain unchanged.
(3) A minimum cash balance of $478,000 is desired.
(4) A new machine costing $651,000 will be acquired in 2020, and equipment costing $854,000 will be purchased in 2021. Total depreciation in 2020 is forecast as $295,000, and in 2021 $394,000 of depreciation will be taken.
(5) Accruals are expected to rise to $499,000 by the end of 2021.
(6) No sale or retirement of long-term debt is expected.
(7) No sale or repurchase of common stock is expected.
(8) The dividend payout of 50% of net profits is expected to continue.
(9) Sales are expected to be $11.8 million in 2020 and $11.8 million in 2021.
(10) The December 31, 2019, balance sheet is here
a. Prepare a pro forma balance sheet dated December 31, 2021.
b. Discuss the financing changes suggested by the statement prepared in part (a)
a. Prepare a pro forma balance sheet dated December 31, 2021.
Complete the assets part of the pro forma balance sheet for Peabody & Peabody for December 31, 2021 below. (Round to the nearest dollar)
Pro Forma Balance Sheet
Data Table
Peabody & Peabody
December 31, 2021
Assets
(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet
Current assets
Leonard Industries Balance Sheet December 31, 2019
Liabilities and Stockholders' Equity
Accounts payable
Cash
%24
Assets
Cash
Marketable securities
Accounts receivable
$399,000
199,000
$1,397,000
Marketable securities
Accruals
395,000
Accounts receivable
%24
1,203,000
Other current liabilities
Total current liabilities
Long-term debt
Common stock
Total liabilities and
stockholders' equity
80,300
$1,872,300
2,016,700
3,716,000
Inventories
Total current assets
Net fxed assets
1.805,000
$3,606,000
3,999.000
Inventories
Total current assets
Net foxed assets
Total assets
$7,605.000
$7,605,000
Total assets
%24
Print
Done
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Transcribed Image Text:Pro forma balance sheet Peabody & Peabody has 2019 sales of $10.6 million. It wishes to analyze expected performance and financing needs for 2021-2 years ahead. Given the following information, respond to parts a. and b. (1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable; 12.3%, Inventory: 17.6%, Accounts payable, 13.9%; Net profit margin, 2.7%. (2) Marketable securities and other current liabilities are expected to remain unchanged. (3) A minimum cash balance of $478,000 is desired. (4) A new machine costing $651,000 will be acquired in 2020, and equipment costing $854,000 will be purchased in 2021. Total depreciation in 2020 is forecast as $295,000, and in 2021 $394,000 of depreciation will be taken. (5) Accruals are expected to rise to $499,000 by the end of 2021. (6) No sale or retirement of long-term debt is expected. (7) No sale or repurchase of common stock is expected. (8) The dividend payout of 50% of net profits is expected to continue. (9) Sales are expected to be $11.8 million in 2020 and $11.8 million in 2021. (10) The December 31, 2019, balance sheet is here a. Prepare a pro forma balance sheet dated December 31, 2021. b. Discuss the financing changes suggested by the statement prepared in part (a) a. Prepare a pro forma balance sheet dated December 31, 2021. Complete the assets part of the pro forma balance sheet for Peabody & Peabody for December 31, 2021 below. (Round to the nearest dollar) Pro Forma Balance Sheet Data Table Peabody & Peabody December 31, 2021 Assets (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet Current assets Leonard Industries Balance Sheet December 31, 2019 Liabilities and Stockholders' Equity Accounts payable Cash %24 Assets Cash Marketable securities Accounts receivable $399,000 199,000 $1,397,000 Marketable securities Accruals 395,000 Accounts receivable %24 1,203,000 Other current liabilities Total current liabilities Long-term debt Common stock Total liabilities and stockholders' equity 80,300 $1,872,300 2,016,700 3,716,000 Inventories Total current assets Net fxed assets 1.805,000 $3,606,000 3,999.000 Inventories Total current assets Net foxed assets Total assets $7,605.000 $7,605,000 Total assets %24 Print Done
Liabilities and stockholders' equity
Current liabilities
Accounts payable (14.7%)
Accruals
Other current liabilities
Total current liabilities
Long-term debts
Total liabilities
Common stock and Retained Earnings
External funds required
Total liabilities and stockholders' equity
expand button
Transcribed Image Text:Liabilities and stockholders' equity Current liabilities Accounts payable (14.7%) Accruals Other current liabilities Total current liabilities Long-term debts Total liabilities Common stock and Retained Earnings External funds required Total liabilities and stockholders' equity
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