the pro forma income statement, and the balance sheet still have to be completed. The following information is available as 12/31/X8. Prior Year Balance Sheet Assets Cash $45,000 Accounts Receivable $55,000 Materials Inventory $40,000 Work-in-Process Inventory $30,000 Finished Goods Inventory $36,000 Prepaid Expenses $20,000 Plant and Equipment $500,000 Accumulated Depreciation ($140,000) Other Assets $22,000 Total Assets $608,000 Liabilities and Equity Accounts Payable $103,000 Other Current Liabilities $42,000 Income Taxes Payable $25,000 Long-Term Debt $300,000 Total Liabilities $470,000 Common Stock $100,000 Retained Earnings $38,000 Total Equity $138,000 Total Liabilities and Equity $608,000 Information From Recent Budgets for the Coming Year Projected sales are $2,080,000 (13,000 units). Projected direct materials purchases are $525,000. Projected direct materials usage is $510,000. Projected direct labor expense is $420,000. Projected overhead is $390,000. Projected selling expenses are $130,000. Projected administrative expenses are $310,000. Projected cash collections are $1,805,000. Projected payments for materials (accounts payable) are $550,000. Projected payments for other operating expenses (other current liabilities) are $1,155,000. Projected depreciation expense is $60,000 and is already included in manufacturing overhead. Additional Information That Is Available The expected tax rate is 20%. The company is planning a stock issue of $50,000. Income taxes are paid 3 months after year-end. The company anticipates purchasing a new patent for $20,000 during the year. Work-in-Process Inventory is expected to decrease by $2,500. Finished Goods Inventory is expected to increase by $9,000. Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000. Investment Information A purchase of additional equipment for $80,000 is expected on January 2, 20X9. The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000. Long-Term Debt Information All long-term debt will have a 9% annual rate. A payment of $50,000 including both principal and interest will be made on December 31, 20X9. PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.
the pro forma income statement, and the balance sheet still have to be completed. The following information is available as 12/31/X8. Prior Year Balance Sheet Assets Cash $45,000 Accounts Receivable $55,000 Materials Inventory $40,000 Work-in-Process Inventory $30,000 Finished Goods Inventory $36,000 Prepaid Expenses $20,000 Plant and Equipment $500,000 Accumulated Depreciation ($140,000) Other Assets $22,000 Total Assets $608,000 Liabilities and Equity Accounts Payable $103,000 Other Current Liabilities $42,000 Income Taxes Payable $25,000 Long-Term Debt $300,000 Total Liabilities $470,000 Common Stock $100,000 Retained Earnings $38,000 Total Equity $138,000 Total Liabilities and Equity $608,000 Information From Recent Budgets for the Coming Year Projected sales are $2,080,000 (13,000 units). Projected direct materials purchases are $525,000. Projected direct materials usage is $510,000. Projected direct labor expense is $420,000. Projected overhead is $390,000. Projected selling expenses are $130,000. Projected administrative expenses are $310,000. Projected cash collections are $1,805,000. Projected payments for materials (accounts payable) are $550,000. Projected payments for other operating expenses (other current liabilities) are $1,155,000. Projected depreciation expense is $60,000 and is already included in manufacturing overhead. Additional Information That Is Available The expected tax rate is 20%. The company is planning a stock issue of $50,000. Income taxes are paid 3 months after year-end. The company anticipates purchasing a new patent for $20,000 during the year. Work-in-Process Inventory is expected to decrease by $2,500. Finished Goods Inventory is expected to increase by $9,000. Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000. Investment Information A purchase of additional equipment for $80,000 is expected on January 2, 20X9. The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000. Long-Term Debt Information All long-term debt will have a 9% annual rate. A payment of $50,000 including both principal and interest will be made on December 31, 20X9. PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 12MCQ: Smoltz Company reported the following information for the current year: cost of goods sold,...
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the pro forma income statement, and the balance sheet still have to be completed.
The following information is available as 12/31/X8.
Prior Year Balance Sheet
Assets | |
---|---|
Cash | $45,000 |
Accounts Receivable | $55,000 |
Materials Inventory | $40,000 |
Work-in-Process Inventory | $30,000 |
Finished Goods Inventory | $36,000 |
Prepaid Expenses | $20,000 |
Plant and Equipment | $500,000 |
($140,000) | |
Other Assets | $22,000 |
Total Assets | $608,000 |
Liabilities and Equity
Accounts Payable | $103,000 |
Other Current Liabilities | $42,000 |
Income Taxes Payable | $25,000 |
Long-Term Debt | $300,000 |
Total Liabilities | $470,000 |
Common Stock | $100,000 |
$38,000 | |
Total Equity | $138,000 |
Total Liabilities and Equity | $608,000 |
Information From Recent Budgets for the Coming Year
- Projected sales are $2,080,000 (13,000 units).
- Projected direct materials purchases are $525,000.
- Projected direct materials usage is $510,000.
- Projected direct labor expense is $420,000.
- Projected overhead is $390,000.
- Projected selling expenses are $130,000.
- Projected administrative expenses are $310,000.
- Projected cash collections are $1,805,000.
- Projected payments for materials (accounts payable) are $550,000.
- Projected payments for other operating expenses (other current liabilities) are $1,155,000.
- Projected depreciation expense is $60,000 and is already included in manufacturing overhead.
Additional Information That Is Available
- The expected tax rate is 20%.
- The company is planning a stock issue of $50,000.
- Income taxes are paid 3 months after year-end.
- The company anticipates purchasing a new patent for $20,000 during the year.
- Work-in-Process Inventory is expected to decrease by $2,500.
- Finished Goods Inventory is expected to increase by $9,000.
- Due to insurance rate increases, it is expected that prepaid expenses will increase by $5,000.
Investment Information
- A purchase of additional equipment for $80,000 is expected on January 2, 20X9.
- The purchase will be made using $50,000 cash and long-term debt will be increased by $30,000.
Long-Term Debt Information
- All long-term debt will have a 9% annual rate.
- A payment of $50,000 including both principal and interest will be made on December 31, 20X9.
PLEASE SOLVE THE FOLLOWING: Prepare a pro forma income statement, and the balance sheet still have to be completed.
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