Question

​Jim's Espresso expects sales to grow by 10.0% next year. Assume that​ Jim's pays out 90% of its net income. Use the following statements and the percent of sales method to​ forecast:

a.​ Stockholders' equity

b. Accounts payable

The Tax Cuts and Jobs Act of 2017 temporarily allows​ 100% bonus depreciation​ (effectively expensing capital​ expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

1: Data Table

Click on the icons located on the​ top-right corners of the data tables below to copy their contents into a spreadsheet.

Income Statement			Balance Sheet
Sales	$200,000		Assets
Costs Except Depreciation	(100,000)		Cash and Equivalents	$15,000
EBITDA	$100,000		Accounts Receivable	2,000
Depreciation	(6,000)		Inventories	4,000
EBIT	$94,000		Total Current Assets	$21,000
Interest Expense​ (net)	(400)		​Property, Plant, and Equipment	10,000
​Pre-tax Income	$93,600		Total Assets	$31,000
Income Tax	(32,760)
Net Income	$60,840		Liabilities and Equity
			Accounts Payable	$ 1 comma 500$1,500
			Debt	4 comma 0004,000
			Total Liabilities	$ 5 comma 500$5,500
			​Stockholders' Equity	25 comma 50025,500
			Total Liabilities and Equity	$ 31 comma 000$31,000

Answer 1