Dproformabalancesheetandcashbudget 87 8

D)proformabalancesheetandcashbudget.
87)
8

88)Afirmplanstodepreciateafiveyearassetinthenextplanningperiod. Thestatementsthatwillbe
directlyaffectedimmediatelyarethe
A)proformaincomestatement,proformabalancesheet,andcashbudget.
B)cashbudgetandproformabalancesheet.
C)proformaincomestatementandproformabalancesheet.
D)proformabalancesheet,cashbudget,andstatementofretainedearnings.
88)
FIGURE4.1
Sportif,Inc.
Month Sales Disbursements
January $5,000 $6,000
February 6,000 $7,000
March 10,000 $4,000
April 10,000 $5,000
May 10,000 $5,000
89)ThetotalcashreceiptsforAprilare________.(SeeFigure4.1)
A)$5,000 B)$9,250 C)$10,000 D)$7,500
89)
90)ThenetcashflowforFebruaryis________.(SeeFigure4.1)
A)$5,750 B)$750 C) - $1,250 D) - $1,000
90)
91)Thefirmhasanegativenetcashflowinthemonth(s)of(SeeFigure4.1)
A)February. B)FebruaryandMarch.
C)JanuaryandFebruary. D)January,February,andMarch.
91)
92)AssumingazerocashbalanceatthestartofJanuary,thecashbalanceattheendofMarchis
________.(SeeFigure4.1)
A)$4,000 B)$500 C)$250 D)$2,500
92)
93)Thefirmhasatotalfinancingrequirementof________fortheperiodfromJanuarythroughMay.
(SeeFigure4.1)
A)$1,250 B)$750 C)$1,750 D)$0
93)
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FIGURE4.2
Usethepercent - of - salesmethodtoprepareaproformaincomestatementfortheyearendedDecember31,2004,forSaw
Lumber,Inc.
SawLumber,Inc.estimatesthatitssalesin2000willbe$4,500,000. Interestexpenseistoremainunchangedat$105,000and
thefirmplanstopaycashdividendsof$150,000during2004. TheincomestatementfortheyearendedDecember31,2003
isshownbelow.
IncomeStatement
SawLumber,Inc.
FortheYearEndedDecember31,2003
SalesRevenue $4,200,000
Less:Costofgoodssold 3,570,000
--------
Grossprofits $ 630,000
Less:Operatingexpenses 210,000
--------
Operatingprofits $ 420,000
Less:Interestexpense 105,000
--------
Netincomebeforetaxes $ 315,000
Less:Taxes(40%) 126,000
--------
Netincomeaftertaxes $ 189,000
Less:Cashdividends 120,000
--------
To:Retainedearnings $ 69,000
Fromyourpreparationoftheproformaincomestatement,answerthefollowingmultiplechoicequestions.
94)Theproformacostofgoodssoldfor2004is________.(SeeFigure4.2)
A)$3,750,000 B)$3,500,000 C)$4,000,000 D)$3,825,000
94)
95)Theproformaoperatingexpensesfor2004are________.(SeeFigure4.2)
A)$210,000 B)$225,000 C)$200,000 D)$150,000
95)
96)Theproformanetincomeaftertaxesfor2004are________.(SeeFigure4.2)
A)$57,000 B)$202,500 C)$52,500 D)$207,000
96)
97)Theproformaaccumulatedretainedearningsaccountonthebalancesheetisprojectedto
________.(SeeFigure4.2)
A)decrease$52,500 B)increase$52,500
C)decrease$57,000 D)increase$57,000
97)
FIGURE4.3
AfinancialmanageratGeneralTalcMineshasgatheredthefinancialdataessentialtoprepareaproformabalancesheetfor
cashandprofitplanningpurposesforthecomingyearendedDecember31,2004. Usingthepercent - of - salesmethodand
thefollowingfinancialdata,preparetheproformabalancesheetinordertoanswerthefollowingmultiplechoicequestions.
A. Thefirmestimatessalesof$1,000,000.
10

B. Thefirmmaintainsacashbalanceof$25,000.
C. Accountsreceivablerepresents15percentofsales.
D. Inventoryrepresents35percentofsales.
E. Anewpieceofminingequipmentcosting$150,000willbepurchasedin2004.
Totaldepreciationfor2004willbe$75,000.
F. Accountspayablerepresents10percentofsales.
G. Therewillbenochangeinnotespayable,accruals,andcommonstock.
H. Thefirmplanstoretirealongtermnoteof$100,000.
I. Dividendsof$45,000willbepaidin2004.
J. Thefirmpredictsa4percentnetprofitmargin.
BalanceSheet
GeneralTalcMines
December31,2003
Assets
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Cash $ 25,000
Accountsreceivable 120,000
Inventories 300,000
--------
Totalcurrentassets $445,000
Netfixedassets $500,000
--------
Totalassets $945,000
Liabilitiesandstockholders ʹ equity
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Accountspayable $ 80,000
Notespayable 350,000
Accruals 50,000
--------
Totalcurrentliabilities $480,000
Long - termdebts 150,000
--------
Totalliabilities $630,000
Stockholders ʹ equity
Commonstock $180,000
Retainedearnings 135,000
--------
Totalstockholders ʹ equity $315,000
--------
Totalliabilitiesandstockholders ʹ equity $945,000
98)Theproformatotalcurrentassetsamountis________.(SeeFigure4.3)
A)$500,000 B)$575,000 C)$525,000 D)$470,900
98)
99)Theproformanetfixedassetsamountis________.(SeeFigure4.3)
A)$500,000 B)$600,000 C)$650,000 D)$575,000
99)
100) Theproformacurrentliabilitiesamountis________.(SeeFigure4.3)