Question

The most recent financial statements for Crosby Inc., follow. Sales for 2018 are proiected to grow by 20 percent. Interest expense will remain constant: the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INC 2017 Income Statement Sales Costs Other expenses $759,000 594,000 30,000 Earnings before interest and taxes Interest paid $135,000 26,000 Taxable income Taxes (219) $109,000 22.890 Net income $86,110 Dividends Addition to retained earnings $26.694 59,416 CROSBY, INC Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 21,840 Accounts payable $ 56,000 Accounts receivable 44,780 Notes payable 15.200 Inventory 103.960 Total $ 71,200 Total $ 170,580 Long-term debt $ 142,000

Answer 1

Sales	910800
Cost	712800
Other Expense	36000
EBIT	162000
Interest	26000
Taxable Income	136000
Taxes	28560
Net Income	107440
Proforma Balance Sheet
Assets		Liabilities and owners equity
Current Assets		Current Liabilities
Cash	26208	Accounts payable	67200
Accounts receivable	53736	Notes Payable	15200
Inventory	124752	Total	82400
Total	204696	Long term debt	142000
		Owners equity
Fixed Assets		Common Stock	120500
Plant & Equipment	486218	Retained Earnings	346014
		Total	466514
	690914		690914