Case 1 - Clarkson Lumber Template.xlsx

Total liabilities and net worth 1637 check total

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Total Liabilities and Net Worth $1,637 Check: Total Assets - Total Liabilities & Equity = Income Statement Most Recent 1995 Input For 1996 Forecast Net sales $4,519 Cost of Goods Sold: Beginning inventory 432 1995 ending inventory Purchases 3,579 End Inventory - Beg Inventory + COGS $4,011 Projected Financial Statements Year Ending December 31, 1996 (thousands)
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Ending inventory 587 x 1996 sales Total Cost of Goods Sold $3,424 x 1996 sales Gross profit 1,095 Operating expenses 940 x 1996 sales Earnings before interest and taxes $155 Interest expense Bank loan (.11 x average loan) 36 avg loan during year x .11 Existing fixed rate debt 20 term loan payment Net income before income taxes $99 22 See table to the right Net income $77 Provision for income taxes a a The first $50,000 of pretax profits is taxed at a 15% rate; the next $25,000 are taxed at a 25% rate; the next $25,000 are taxed at a 34% rate $100,000 but less than $335,000 are taxed at a 39% rate.
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Forecast 1996 $0 Forecast 1996
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e; and profits in excess of
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Status Quo Scenario 2 Assumptions: 1. The historical conditions that prevailed in 1993-1995 will continue in 1996. 2. The sales volume for 1996 will be $5.5 million, as Mr. Clarkson anticipates. Balance Sheet Most Recent 1995 Input For 1996 Forecast Cash $56 x 1996 sales Accounts receivable, net 606 x 1996 sales Inventory 587 Avg inventory turnover Current assets $1,249 Property, net 388 x 1996 sales Total Assets $1,637 Notes payable, bank $390 Note payable to Holtz, current portion 100 Notes payable, trade 127 Accounts payable 376 Days payables Accrued expenses 75 x 1996 sales Term loan, current portion 20 Remains constant Current liabilities $1,088 Term loan 100 Note payable, Mr. Holtz 0 Total Liabilities $1,188 Net worth 449 Previous RE + Add. To RE Total Liabilities and Net Worth $1,637 Check: Total Assets - Total Liabilities & Equity = Income Statement Most Recent 1995 Input For 1996 Forecast Net sales $4,519 Cost of Goods Sold: Beginning inventory 432 1995 ending inventory 3,579 End Inventory - Beg Inventory + COGS $4,011 Projected Financial Statements Year Ending December 31, 1996 (thousands) Purchases a
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Ending inventory 587 - Inventory turnover Total Cost of Goods Sold $3,424 0.0% x 1996 sales Gross profit 1,095 Operating expenses 940 0.0% x 1996 sales Earnings before interest and taxes $155 Interest expense Bank loan (.11 x average loan) 36 #DIV/0! avg loan during year x .11 Existing fixed rate debt 20 term loan payment Net income before income taxes $99 22 See table to the right Net income $77 Provision for income taxes a a The first $50,000 of pretax profits is taxed at a 15% rate; the next $25,000 are taxed at a 25% rate; the next $25,000 are taxed at a 34% rate $100,000 but less than $335,000 are taxed at a 39% rate.
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Forecast 1996 $0 Forecast 1996
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e; and profits in excess of
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Improved Scenario 1 Assumptions: 1. The historical conditions that prevailed in 1993-1995 will continue in 1996. 2. The sales volume for 1996 will be $5.5 million, as Mr. Clarkson anticipates. 3. All purchase discounts will be taken for the period April 1 to December 31, 1996.
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  • Spring '09
  • Balance Sheet, Generally Accepted Accounting Principles, Mr. Holtz, Mr. Clarkson

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