Question

Integrative-Pro forma statements Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for 2020 will be $900,400. (2) The firm expects to pay $35,300 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $31,800. (4) Accounts receivable represent approximately 19% of annual sales. Data Table (5) The firm's ending inventory will change directly with changes in sales in 2020 (6) A new machine costing $42,700 will be purchased in 2020. Total depreciation for 2020 will be $15,400. (7) Accounts payable will change directly in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the proforma income statement (Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a (9) Markelable securities, other current liabilities, long-term det, and common stock will remain unchanged. spreadsheet.) a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach Red Queen Restaurants Income Statement C. Analyze these statements, and discuss the resulting external financing required. for the Year Ended December 31, 2019 Sales revenue $800,700 a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. Less: Com of goods sold 600,300 Gross profits $200,400 Complete the pro forma income statement for the year ended December 31, 2020 below (Round to the nearest dollar Less: Operating expensos 99,600 Net profits before taxes $100,000 Pro Forma Income Statement Less: Taxos (rate=21%) 21,168 Red Queen Restaurants Net profits after taxes $79.632 Less: Cash dividends 19,400 for the Year Ended December 31, 2020 To retained earnings $60 232 (percent-of-sales method) Red Queen Restaurants Balance Sheet December 31, 2019 00400 Sales Assets Liabilities and Stockholders' Equity Less: Cost of goods sold Cash $31,600 Accounts payable $99,000 Marketable securities 19.900 Taxes payable 19.200 Gross profits Accounts receivable 149, 100 Other current liabilities 4,000 Less: Operating expenses Inventories 99 900 Total current liabilities $122.200 Total current assets $299,500 Long-term debt $201.500 Net profits before taxes Net fixed assets 349,100 Common stock $149.900 Less: Taxes (rate=21%) Retained earnings $175,000 Total assels Net profits after taxes $648,600 $648,600 Total liabilities and equity Less: Cash dividends To Retained earnings Print Dono : v 3 U2 u2 ua Ma Ma Ma |

Answer 1

Answer is given below

Please note answer may slightly vary depending on % decimals taken

75.0% Pro Forma Income Statement Red Queen Restaurant For the year ended December 31, 2020 Percent of Sale method Net Sales $900,400 Less: Cost of Goods Sold $675,047 Gross profit $225,353 Less: Operating Expenses $112,227 Net profit before taxes $113,126 Less: Taxes at 21% $23,757 Net profit after taxes $89,370 Less: Cash Dividends $35,300 To Retained Earnings $54,070 12.5% Working Sales COGS $800,700 $600,3001 75.0% Operating Expenses % to Sales $99,800 12.5%