Week 3 Assignment - Pro Forma Statements

Week 3 Assignment - Pro Forma Statements - CHAPTER 4...

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CHAPTER 4 COMPREHENSIVE PROBLEM The Landis Corporation had 2008 sales of $100 million. The balance sheet items that vary directly with sales and the profit margin are as follows: Percent Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% Accounts receivable. . . . . . . . . . . . . . . . . . . . . . 15 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Net fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . 40 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 15 Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Profit margin after taxes . . . . . . . . . . . . . . . . . . 6% The dividend payout rate is 50 percent of earnings, and the balance in retained earnings at the end of 2008 was $33 million. Common stock and the company’s long-term bonds are constant at $10 million and $5 million, respectively. Notes payable are currently $12 million. a.
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Week 3 Assignment - Pro Forma Statements - CHAPTER 4...

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