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 nise 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 S11.8 million in 2020 and $11.8 million in 2021. (10) The December 31, 2019, balance sheet is here m 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 O Data Table Peabody & Peabody December 31, 2021 Assets (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadshe Current assets Leonard Industries Balance Sheet December 31, 2019 Liabilities and Stockholders' Equity Accounts payable Accruals Other current liabilities Total current liabilities %24 Assets Cash Marketable securities Cash $399,000 $1,397,000 395,000 Marketable securities 199,000 Accounts receivable Accounts receivable 1,203,000 1,805,000 $3,606,000 3,999.000 80,300 $1,872,300 Inventories Total current assets Net fxed assets Inventories %24 Long-term debt Common stock Total liabilities and stockholders' equity 2,016,700 3,716,000 Total current assets %24 Net foxed assets Total assets $7.605,000 $7.605,000 Total assets Print Done

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

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
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
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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Personal Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education