Create an Excel spreadsheet to organize your answers to the following problem, and submit your Excel file.
[Hint: I recommend you copy this problem to a Word or Excel document and print it out so that you can work with it in a reasonable manner.]
A company published the following information in its financial statements for its 2015 annual report:
|
Sales
|
|
$76,000
|
|
- Cost of goods sold
|
|
49,000
|
|
Gross profit
|
|
27,000
|
|
- Cash Operating expenses
|
$9,000
|
|
|
- Depreciation
|
2,000
|
|
|
Total Operating Expenses
|
|
11,000
|
|
EBIT
|
|
16,000
|
|
- Interest expense
|
|
840
|
|
EBT
|
|
15,160
|
|
- Tax expense
|
|
5,306
|
|
Net Income
|
|
$9,854
|
|
|
|
|
|
- Dividends
|
|
3,942
|
|
Addition to retained earnings
|
|
$5,912
|
|
Cash
|
$9,000
|
|
Marketable securities
|
2,000
|
|
Accounts receivable
|
11,000
|
|
Inventories
|
7,000
|
|
Fixed Assets, net
|
24,000
|
|
Total Assets
|
$53,000
|
|
|
|
|
Accounts payable
|
$8,000
|
|
Accrued payables
|
3,000
|
|
Bonds payable
|
12,000
|
|
Common stock
|
16,000
|
|
Retained earnings
|
14,000
|
|
Total Liabilities and Equity
|
$53,000
|
Sales in 2016 are estimated to be $90,000. Cost of goods sold and $5,000 of the cash operating expenses are considered variable costs.
• Depreciation and the remainder of cash operating expenses are considered to be fixed costs.
• Cash, accounts receivable, inventories, accounts payable, and accrued payables are considered to be spontaneous items.
• Marketable securities, net fixed assets, bonds payable, and common stock are discretionary.
• $5,000 of bonds payable at the end of 2015 are considered "current liabilities," and will be repaid in early 2016.
• The company purchased fixed assets of $3,600 in 2016, but depreciation for 2016 will remain the same dollar amount as it was for 2015.
• The firm will maintain its 2015 dividend payout ratio in 2016.
• The income tax rate for 2016 is expected to be the same as it was in 2015.
Required:.
Prepare the pro-forma 2016 income statement, balance sheet, and statement of cash flows