Total l e 52288 6 need external financing of 321 7

Info icon This preview shows pages 8–13. Sign up to view the full content.

Total L + E $52,288 (6) Need external financing of $321.
Image of page 8

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

┘(7) Pro-forma Cash-Flow Statement For the year ending December 31, 2012 CASH FLOWS FROM OPERATIONS Received from customers $78,568 Paid to suppliers and employers (59,568) Interest paid (1,235) Income taxes paid (4,767) Net cash provided by operating activities 12,998 CASH FLOWS FROM INVESTMENTS Payment for purchases of property plant and equipment (7,856) $22,856  20,000 + 5,000 Net cash used for investing activities (7,856) CASH FLOWS FROM FINANCING Paid to retire bonds (500) External financing needed 321 Div. paid (3,819) Net cash used for financing activities (3,998) Net increase (decrease) in cash 1,144 Cash and equivalents, beginning of year 8,000 Cash and equivalents, end of year $9,144 To cash provided by operations NI $ 8,854 Add back: Depreciation 5,000 Subtract: Increase in A/R (1,432) 11,432 10,000 Inventories (856) 6,856 6,000 Add: Increase in Accounts payable 1,000 8,000 7,000 Accrued payables 432 3,432 3,000 Net cash provided by operations $12,998 16) (1)Forecast sales : given as $650,000. (2) Classify accounts : given in items (1)(4) (a) Variable : all of cost of goods sold, $30,000 of operating expenses, all of depreciation expense. (b)Fixed : remaining $45,000 of operating expenses. (c)Spontaneous : all of cash, accounts receivable, inventories, net plant, accounts payable, and accrued payables. (d) Discretionary : marketable securities, bonds payable, and common stock. (3) (a) Variable costs
Image of page 9
CGS: 350,000 = .70 500,000 Op. exp: 30,000 = .06 500,000 Depreciation exp: 20,000 = .04 500,000 (b) Spontaneous accounts Cash: 25,000 = 5.00% 500,000 A/R: 50,000 = 10.00% 500,000 Inventories: 85,000 = 17.00% 500,000 Net plant: 200,000 = 40.00% 500,000 Accounts payable: 60,000 = 12.00% 500,000 Accrued payables: 35,000 = 7.00% 500,000 (c) Other Interest rate: 20,000 = 14.29% 140,000 Tax rate: 12,250 = 35.00% 35,000 Div. payout ratio: 10,000 = 43.96% 22,750 (4) (a) Variable costs CGS: 70%($650,000) = $455,000 Variable operating expense: 6%($650,000) = $39,000 Total operating expense = $39,000 + $45,000 = $84,000 Depreciation expense: 4%($650,000) = $26,000 (b) Spontaneous accounts Cash: 5.00%($650,000) = $ 32,500 Accounts receivable: 10.00%($650,000) = 65,000 Inventories: 17.00%($650,000) = 110,500 Net plant: 40.00%($650,000) = 260,000 A/P: 12.00%($650,000) = 78,000 Accrued payables: 7.00%($650,000) = 45,500 (c) Other Interest expense: 14.29%($130,000) = $18,577 (5) Pro-forma income statement For the year ending 12/31/12
Image of page 10

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Sales $650,000 forecast  Cost of goods sold 455,000 projection Gross profit 195,00  Operating expenses $84,000 projection  Depreciation 26,000 projection 110,000 EBIT 85,000  Interest expense 18,577 projection EBT 66,423  Tax Expense 23,248 calculation EAT $ 43,175  Dividends 18,980 calculation
Image of page 11
Addition to retained earnings $ 24,195 Proforma Balance Sheet December 31, 2012 Cash $ 32,500 projection Marketable securities 10,000 discretionary Accounts receivable 65,000 projection Inventories 110,500 projection Plant, net 260,000 projection TA $478,000 A/P 78,000 projection Accrued payables 45,500 projection Bonds payable 130,000 projection Common stock 105,000 discretionary RE 54,195 412,695 External financing needed 65,305 a balance Total L + E $478,000 (7) CASH FLOWS FROM OPERATIONS Received from customers $635,000 Paid to suppliers and employers (536,000) Interest paid (18,577)
Image of page 12

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 13
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern