Question

P4-18 (similar to) Question Help Pro forma balance sheet Peabody & Peabody has 2015 sales of $10.5 million. It wishes to analyze expected performance and financing needs for 2017-2 years ahead. Given the following information, respond to parts a. and b. (1) The percents of sales for items that vary directly with sales are as follows Accounts receivable; 12.1% Inventory: 18.4%; Accounts payable, 14.4%; Net profit margin, 3.1%. (2) Marketable securities and other current liabilities are expected to remain unchanged (3) A minimum cash balance of $485,000 is desired (4) A new machine costing $647,000 will be acquired in 2016, and equipment costing $851,000 will be purchased in 2017. Total depreciation in 2016 is forecast as $291,000, and in 2017 S391,000 of depreciation will be taken. (5) Accruals are expected to rise to $495,000 by the end of 2017 (6) No sale or retirement of long-term debt is expected (7) No sale or repurchase of common stock is expected (8) The dividend payout of 50% of net profits is expected to continue. (9) Sales are expected to be $11.6 million in 2016 and $11.3 milion in 2017 a. Prepare a pro forma balance sheet dated December 31, 2017 Complete the assets part of the pro forma balance sheetfor Peabody & Peabody for December 31, 2017 below: (Round to the nearest dolar.) Pro Forma Balance Sheet Peabody &Peabody December 31, 2017 Current assets Cash Marketable securiies Accounts receivable Total current assets Net fixed assets Total assets