Joshua, Inc Pro forma statement problem Joshua Pro Forma Assignment 9.19.18-1.do

Question

Joshua, Inc
Pro forma statement problem

Joshua Pro Forma Assignment 9.19.18-1.doc Protected View Saved to this PC ces Mailings Review View Help Foxit POF Tell me what you want to do ontain viruses. Unless you need to edit, it's safer to stay in Protected Vew. Enable Editing JOSHUA, INC Pro Forma Statements Problem A) 1 Balance Sheet 12/31/17 Year Ended 2017 Sales Cost of Goods Sold Gross Profit Expenses Earnings Before Tax Tax (5) Net Income $27,000 18,900 8,100 Cash Accounts Receivable s 500 4,500 3,150 6,000 2,100 Gross Fixed Assets 54,000 Accumulated Depreciation 21600 Net Fixed Assets 32 400 $ 1050 Total Assets Accounts Payable Notes Payable Accrued Tax Common Stock Retained Earnings Total Debt & Equity 1,575 19,175 263 15,787 A. Based on the 2017 Financial Statements above, compute Pro Forma's for 2018 using the percent of sales method using the following assumptions 20% growth rate in sales, and 15% dividend payout b,

Explanation / Answer

Income Statement Year ended 2018 Sales [$27000*120%] $32,400.00 Cost of goods sold [70% of sales] $22,680.00 Gross Profit $9,720.00 Expenses $7,200.00 Earnings Before tax $2,520.00 Tax [50%] $1,260.00 Net Income $1,260.00 Addition to retained earnings = Net Income x (1-dividend payout ratio) Addition to retained earnings = $1260 x (1-0.15) = $1071 Balance Sheet 31.12.2018 Assets Cash $600.00 Accounts Receivables $5,400.00 Inventory $3,780.00 Gross Fixed Assets $64,800.00 Less : Accumulated Depreciation $25,920.00 Net Fixed Assets $38,880.00 Total Assets $48,660.00 Liabilities and Equity Accounts Payable $1,890.00 Notes Payable $23,010.00 Accrued Tax $315.60 Common stock $18,944.40 Retained Earnings $4,500.00 Total Debt & Equity $48,660.00

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