Problem:
You are given the following table of data for your client, Betsen Boutique.
Set up a simple Income Statement, including common size columns.
Next, use the Percent of Sales method to forecast results for 2005.
Sales are projected to be $165,000 in 2005.
(Note, not all info below is required for the Income Statement)
| Item |
|
|
|
|
2004 |
|
2003 |
|
|
|
|
|
|
|
|
| Accounts Payable |
|
|
|
$12,000 |
|
$10,700 |
| Accounts Receivable |
|
|
|
$54,400 |
|
$55,300 |
| Accumulated Depreciation |
|
|
$30,200 |
|
$27,900 |
| Cash & Equivalents |
|
|
|
$10,500 |
|
$9,700 |
| Common Stock |
|
|
|
$40,500 |
|
$40,500 |
| Cost of Goods Sold |
|
|
|
$108,400 |
|
$92,600 |
| Depreciation |
|
|
|
$2,300 |
|
$2,250 |
| Fixed Expenses |
|
|
|
$7,600 |
|
$7,000 |
| Interest |
|
|
|
|
$3,400 |
|
$2,900 |
| Inventory |
|
|
|
|
$42,700 |
|
$37,800 |
| Long-term Debt |
|
|
|
$32,000 |
|
$29,800 |
| Other Current Liabilities |
|
|
$8,400 |
|
$8,600 |
| Plant & Equipment |
|
|
|
$56,900 |
|
$53,000 |
| Retained Earnings |
|
|
|
$22,700 |
|
$18,200 |
| Sales |
|
|
|
|
$150,500 |
|
$138,200 |
| Selling, G & A |
|
|
|
$15,500 |
|
$13,400 |
| Short Term Notes |
|
|
|
$18,700 |
|
$20,100 |
| Tax Rate |
|
|
|
|
30% |
|
30% |
|
|
|
BETSEN BOUTIQUE |
|
|
|
|
|
|
|
INCOME STATEMENT |
|
|
|
|
|
|
And Forecast for 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005* |
%* |
2004 |
% |
2003 |
% |
|
|
|
|
|
|
|
|
|
| Sales |
|
|
$165,000 |
|
|
|
|
|
| Cost of Goods Sold |
|
|
|
|
|
|
|
| Gross Profit |
|
|
|
|
|
|
|
| Selling, G & A |
|
|
|
|
|
|
|
| Fixed Expenses |
|
|
|
|
|
|
|
| Depreciation |
|
|
|
|
|
|
|
| EBIT |
|
|
|
|
|
|
|
|
| Interest |
|
|
|
|
|
|
|
|
| Earnings before taxes |
|
|
|
|
|
|
| Taxes |
|
|
|
|
|
|
|
|
| Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| *Projected |
|
|
|
|
|
|
|