Question

XYZ Company Balance Sheet 12/31/XXXX Assets A Current Assets Cash Accounts Receivable Inventory Prepaid Items Other CA Total Current Assets Net Plant & Equipment Total Assets $7,500 12,100 10,400 5,900 4,300 $40,200 82,300 $122,500

Answer 1

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(A).

XYZ Company

Pro Forma Income Statement

For the year ended 31^st Dec. XXXX

Particulars	Amount ($)
Sales	165,000
Less: Cost of Goods Sold	(137,890)
Gross Profit	27,110
Less: Operating Expenses	(12,830)
Earnings Before Interest and Taxes	14,280
Less: Interest Expenses	(4,610)
Earnings Before Taxes	9,670
Less: Tax@39%	(3,771)
Net income	5,899
Less: Dividend	(1,018)
Addition to Retained Earnings	4,881

XYZ Company

Pro Forma Balance Sheet

As on 31^st Dec. XXXX

Particulars	Amount ($)	Amount ($)
Assets
Current Assets:
Cash	7,500
Accounts Receivables	12,100
Inventory	10,400
Prepaid Items	5,900
Other Current Assets	4,300
Investments	18,000
Total Current Assets		58,200
Net Plant and Equipment		82,300
Total Assets		140,500
Liabilities and Equity
Current Liabilities:
Accounts Payable	7,200
Wages Payable	3,600
Notes Payable	5,400
Taxes Payable	8,520
Total Current Liabilities		24,720
Long Term Debt		35,700
Total Liabilities		60,420
Common Stock		28,700
Retained Earnings		51,380
Total Liabilities and Equity		140,500