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The most recent financial statements for Retro Machine, Inc., follow. Interest expense wil

The most recent financial statements for Retro Machine, Inc., follow. Interest expense wil

The most recent financial statements for Retro Machine, Inc., follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.

 

Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number.)

 

Complete the pro forma balance sheet for each sales growth rate. (Do not round intermediate calculations and round your answers to the nearest whole number.)

15% Sales Growth:

 

20% Sales Growth:

25% Sales Growth:

 

Calculate the EFN for 15, 20, and 25 percent growth rates. (Do not round intermediate calculations and round your answers to the nearest whole number. A negative answer should be indicated by a minus sign.)

RETRO MACHINE, INC.

2016 Income Statement

Sales

 

 

 

$

762,000

 

Costs

 

 

 

 

597,000

 

Other expenses

 

 

 

 

18,000

 

Earnings before interest and taxes

 

 

 

$

147,000

 

Interest paid

 

 

 

 

12,000

 

Taxable income

 

 

 

$

135,000

 

Taxes (40%)

 

 

 

 

54,000

 

Net income

 

 

 

$

81,000

 

Dividends

$

32,400

 

 

 

 

Addition to retained earnings

 

48,600

Abhinav 02-Dec-2019

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