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The most recent financial statements for Retro Machine, Inc.,follow. Sales for 2014 are pr

The most recent financial statements for Retro Machine, Inc.,follow. Sales for 2014 are projected to grow by 20 percent.Interest expense will remain constant; the tax rate and thedividend payout rate will also remain constant. Costs, otherexpenses, current assets, fixed assets, and accounts payableincrease spontaneously with sales.

RETRO MACHINE, INC.

2013 Income Statement

  Sales

 

 

 

$

760,000

 

  Costs

 

 

 

 

595,000

 

  Other expenses

 

 

 

 

16,000

 

 

 

 

 

 

 

 

  Earnings beforeinterest and taxes

 

 

 

$

149,000

 

  Interest paid

 

 

 

 

17,000

 

 

 

 

 

 

 

 

  Taxable income

 

 

 

$

132,000

 

  Taxes (30%)

 

 

 

 

39,600

 

 

 

 

 

 

 

 

  Net income

 

 

 

$

92,400

 

 

 

 

 

 

 

 

  Dividends

$

18,480

 

 

 

 

  Addition to retainedearnings

 

73,920

 

 

 

 

 

             

 

RETRO MACHINE, INC.

Balance Sheet as of December 31, 2013

Assets

 

Liabilities and Owners’ Equity

 

  Current assets

 

 

 

  Currentliabilities

 

 

 

    Cash

$

21,940

 

    Accountspayable

$

56,100

 

    Accountsreceivable

 

34,260

 

    Notespayable

 

15,300

 

 

 

 

 

 

 

 

 

    Inventory

 

71,220

 

      Total

$

71,400

 

 

 

 

 

 

 

 

 

      Total

$

127,420

 

  Long-term debt

$

143,000

 

  Fixed assets

 

 

 

  Owners’ equity

 

 

 

    Netplant and equipment

$

420,000

 

    Commonstock and paid-in surplus

$

129,000

 

 

 

 

 

    Accumulated retained earnings

 

204,020

 

 

 

 

 

 

 

 

 

 

 

 

 

      Total

$

333,020

 

 

 

 

 

 

 

 

 

  Total assets

$

547,420

 

  Total liabilitiesand owners’ equity

$

547,420

 

 

 

 

 

 

 

 

 

 

               

 

The firm is operating at full capacity and no new debt or equityis issued. Calculate the pro forma income statement and balancesheet for the company. (Do not round intermediatecalculations.)

 

Pro Forma Income Statement

  Sales

$

 

 

  Costs

 

 

 

  Other expenses

 

 

 

 

 

 

 

  EBIT

$

 

 

  Interest

 

 

 

 

 

 

 

  Taxable income

$

 

 

  Taxes (30%)

 

 

 

 

 

 

 

  Net income

$

 

 

 

 

 

 

 

       

 

 

Pro Forma Balance Sheet

Assets

 

Liabilities and Owners’ Equity

 

  Current assets

 

 

 

  Currentliabilities

 

 

 

    Cash

$

 

 

    Accountspayable

$

 

 

    Accountsreceivable

 

 

 

    Notespayable

 

 

 

 

 

 

 

 

 

 

 

    Inventory

 

 

 

      Total

$

 

 

 

 

 

 

 

 

 

 

      Total

$

 

 

  Long-term debt

$

 

 

  Fixed assets

 

 

 

  Owners’ equity

 

 

 

    Netplant and equipment

$

 

 

    Commonstock and paid-in surplus

$

 

 

 

 

 

 

    Accumulated retained earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Total

$

 

 

 

 

 

 

 

 

 

 

  Total assets

$

 

 

  Total liabilitiesand owners’ equity

$

 

 

 

 

 

 

 

 

 

 

 

               

 

What external financing is needed to support the 20 percentgrowth rate in sales? (Do not round intermediatecalculations.)

 

  EFN

$  

 

The most recent financial statements for Retro Machine, Inc.,follow. Sales for 2014 are projected to grow by 20 percent.Interest expense will remain constant; the tax rate and thedividend payout rate will also remain constant. Costs, otherexpenses, current assets, fixed assets, and accounts payableincrease spontaneously with sales.

RETRO MACHINE, INC.

2013 Income Statement

  Sales

 

 

 

$

760,000

 

  Costs

 

 

 

 

595,000

 

  Other expenses

 

 

 

 

16,000

 

 

 

 

 

 

 

 

  Earnings beforeinterest and taxes

 

 

 

$

149,000

 

  Interest paid

 

 

 

 

17,000

 

 

 

 

 

 

 

 

  Taxable income

 

 

 

$

132,000

 

  Taxes (30%)

 

 

 

 

39,600

 

 

 

 

 

 

 

 

  Net income

 

 

 

$

92,400

 

 

 

 

 

 

 

 

  Dividends

$

18,480

 

 

 

 

  Addition to retainedearnings

 

73,920

 

 

 

 

 

             

 

RETRO MACHINE, INC.

Balance Sheet as of December 31, 2013

Assets

 

Liabilities and Owners’ Equity

 

  Current assets

 

 

 

  Currentliabilities

 

 

 

    Cash

$

21,940

 

    Accountspayable

$

56,100

 

    Accountsreceivable

 

34,260

 

    Notespayable

 

15,300

 

 

 

 

 

 

 

 

 

    Inventory

 

71,220

 

      Total

$

71,400

 

 

 

 

 

 

 

 

 

      Total

$

127,420

 

  Long-term debt

$

143,000

 

  Fixed assets

 

 

 

  Owners’ equity

 

 

 

    Netplant and equipment

$

420,000

 

    Commonstock and paid-in surplus

$

129,000

 

 

 

 

 

    Accumulated retained earnings

 

204,020

 

 

 

 

 

 

 

 

 

 

 

 

 

      Total

$

333,020

 

 

 

 

 

 

 

 

 

  Total assets

$

547,420

 

  Total liabilitiesand owners’ equity

$

547,420

 

 

 

 

 

 

 

 

 

 

               

 

The firm is operating at full capacity and no new debt or equityis issued. Calculate the pro forma income statement and balancesheet for the company. (Do not round intermediatecalculations.)

 

Pro Forma Income Statement

  Sales

$

 

 

  Costs

 

 

 

  Other expenses

 

 

 

 

 

 

 

  EBIT

$

 

 

  Interest

 

 

 

 

 

 

 

  Taxable income

$

 

 

  Taxes (30%)

 

 

 

 

 

 

 

  Net income

$

 

 

 

 

 

 

 

       

 

 

Pro Forma Balance Sheet

Assets

 

Liabilities and Owners’ Equity

 

  Current assets

 

 

 

  Currentliabilities

 

 

 

    Cash

$

 

 

    Accountspayable

$

 

 

    Accountsreceivable

 

 

 

    Notespayable

 

 

 

 

 

 

 

 

 

 

 

    Inventory

 

 

 

      Total

$

 

 

 

 

 

 

 

 

 

 

      Total

$

 

 

  Long-term debt

$

 

 

  Fixed assets

 

 

 

  Owners’ equity

 

 

 

    Netplant and equipment

$

 

 

    Commonstock and paid-in surplus

$

 

 

 

 

 

 

    Accumulated retained earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Total

$

 

 

 

 

 

 

 

 

 

 

  Total assets

$

 

 

  Total liabilitiesand owners’ equity

$

 

 

 

 

 

 

 

 

 

 

 

               

 

What external financing is needed to support the 20 percentgrowth rate in sales? (Do not round intermediatecalculations.)

 

  EFN

$  

 

Dec 02 2019 Read more Less More

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