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QuestionAnswered step-by-stepI have done this assignment, it is due in 12 hours I want to…I have done this assignment, it is due in 12 hours I want to confirm if it is correct. 1. Consider the following simplified financial statementIncome statement     Balance sheetSales $       39,400      Assets $       29,200  Debt $         9,400 Costs           34,700          Equity           19,800 Net income $         4,700      Total $       29,200  Total $       29,200  The company has predicted a 15% sales increase. It has indicated that every item on the balance sheet will increase by 15%. Create the pro forma statements. What is the plug variable for balancing the balance sheet?  Question 1 assumes that the company pays out 50% of net income as cash dividends to shareholders. Considering that costs and assets vary with sales, but debt and equity do not. Create the pro forma financial statements and determine the external financing needed. Consider the following income statement for the Redrum Company:Income Statement  Sales   $                53,000   Costs                      40,900   Taxable income   $                12,100   Taxes (22%)                        2,662   Net income   $                  9,438   Dividends $      3,500     Addition to RE $      5,938               The company projects a 20% sales growth next year. Assuming costs vary with sales and the dividend payout ratio is constant. Prepare a pro forma income statement. What is the projected addition to retained earnings (RE)? Continue question 3 above. Below is the balance sheet for the Redrum company.Balance Sheet  Assets   Liabilities and Owner’s Equity  Current assets $ %Sales Current liabilities $ %Sales   Cash $       3,140    Accounts payable $         2,600      Accounts Receivable            4,200       Notes payable              5,700      Inventory            6,500          Total       $         8,300         Total $     13,840    Long-term debt   $       28,000   Fixed assets                     Net plant &equipment $     43,200    Owners’ equity               Common stock $         5,000            Retained earnings            15,740               Total       $       20,740         Total liabilities and     Total assets $     57,040      Owners’ equity $       57,040                       Assuming accounts payable vary with sales but notes payable do not. Under the percentage of sales approach, fill in the two highlighted columns under “%Sales”. Use “n/a” if that account doesn’t vary with sales. Based on the information in Question 3 and 4, prepare a pro forma balance sheet showing external financing needed. Assuming a 20% sales growth next year, no new external debt or equity financing, and a constant payout ratio.AccountingBusinessManagerial AccountingFNCE 2465Share Question

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