Business Finance Answers_Part_13

Business Finance Answers_Part_13 - CHAPTER 4 B-49 The pro...

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CHAPTER 4 B-49 The pro forma balance sheet will look like this: 20% Sales Growth : MOOSE TOURS INC. Pro Forma Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 30,360 Accounts payable $ 81,600 Accounts receivable 48,840 Notes payable 17,000 Inventory 104,280 Total $ 98,600 Total $ 183,480 Long-term debt $ 158,000 Fixed assets Net plant and Owners’ equity equipment 495,600 Common stock and paid-in surplus $ 140,000 Retained earnings 278,632 Total $ 418,632 Total liabilities and owners’ Total assets $ 679,080 equity $ 675,232 So the EFN is: EFN = Total assets – Total liabilities and equity EFN = $679,080 – 675,232 EFN = $3,848 At a 25 percent growth rate, and assuming the payout ratio is constant, the dividends paid will be: Dividends = ($33,735/$112,450)($142,838) Dividends = $42,851 And the addition to retained earnings will be: Addition to retained earnings = $142,838 – 42,851 Addition to retained earnings = $99,986 The new retained earnings on the pro forma balance sheet will be: New retained earnings = $182,900 + 99,986 New retained earnings = $282,886 The pro forma balance sheet will look like this:
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Business Finance Answers_Part_13 - CHAPTER 4 B-49 The pro...

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