Week+13+Midterm+2+prep.xlsx - Mid term 2 Forecasting Leasing Bonds General(ratios understanding Calculation 10 points 3 problems 2 points each 1 problem

Mid term 2 Calculation Multiple choice Forecasting 10 points - Leasing 3 problems @ 2 points each 4 @ 1 point each Bonds 1 problem @ 2 points 2 @ 1.5 point each General (ratios understanding)

Open questions 10 10 5 2 @ 2.5 points each 5 30

Part AForecastingComparative income statements and balance sheets for Beverages & Co areshown below ($ millions)2016Income StatementSales20,092 Cost of goods 6,044 Gross profit 14,048 Selling, general, and administrative expense 7,893 Depreciation and amortization expense 803 Interest expense308 Income before tax 5,660 Income tax expense1,691 Net income3,969 Balance Sheet2016Cash 1,934 Receivables1,882 Inventories 1,055 Other current assets 2,300 Total current assets 7,171 Property, plant, and equipment7,105 Accumulated depreciation 2,652 Net property, plant, and equipment4,453 Other noncurrent assets10,793 Total assets22,417 Accounts payable and Accrued liabilities3,679 Short-term debt and Current maturities of long-term debt 3,899 Income tax liabilities851 Total current liabilities8,429 Deferred income taxes and other liabilities1,403 Long-term debt 1,219 Total noncurrent liabilities 2,622 Common stock 873 Capital surplus 3,520 Retained earnings6,973 Shareholders’ equity 11,366 Total liabilities and equity22,417 Problem:(1) Prepare forecast of Company's income statement for 2017. Assume all ratios stay at 2016 lev2017Income StatementSalesCost of goods

Gross profit Selling, general, and administrative expense Depreciation and amortization expense Interest expense (revenue) Income before tax Income tax expense Net income (1) Solution (2) Prepare forecast of Company's income statement for 2017. Use the assumptions below: