ASSETS |
|
Cash |
25000 |
Accounts Receivable |
120000 |
Inventories |
300000 |
Total current assets |
445000 |
Net Fixed Assets |
500000 |
Total Assets |
945000 |
LIABILITIES & STOCKHOLDERS EQUITY |
|
Equity accounts payable |
80000 |
Notes Payable |
350000 |
Accruals |
50000 |
Total current liabilities |
480000 |
Long-term debt |
150000 |
Total Liabilities |
630000 |
Common Stock |
180000 |
Retained Earnings |
135000 |
Total Stockholder's Equity |
315000 |
Total Liabilities & Stockholders Equity |
945000 |
A financial manager at General Talc Mines has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning purposes for the coming year ended December 31, 2010. Using the percent-of-sales method and the following financial data, prepare the pro forma balance sheet.
Total depreciation for 2010 will be $75,000
General Talc Mines | |
Balance Sheet (Projected) | |
For the Year Ended Dec. 31, 2010 | |
ASSETS | |
Cash | $ 25,000 |
Account Receivable | $ 150,000 |
Inventory | $ 350,000 |
Total Current Assets | $ 525,000 |
Net Fixed Assets | $ 575,000 |
Total Assets | $1,110,000 |
LIABILITIES & STOCKHOLDERS' EQQUITY | |
Account Payable | $ 100,000 |
Notes Payable | $ 350,000 |
Accruals | $ 50,000 |
Total Current Liabilities | $ 500,000 |
Long Term Debt | $ 50,000 |
Total Liabilities | $ 550,000 |
Common Stock | $ 180,000 |
Retained Earnings | $ 380,000 |
Total Stockholders' Equity | $ 560,000 |
Total Liabilities & Stockholders' Equity | $1,110,000 |
Explanation: | |
1. Cash to be maintained is $25,000. | |
2. Account Receivable is 15% of $1,000,000 sales, i.e.,$150,000. | |
3. Inventory is calculated 35% of $1,000,000; is $350,000. | |
4. Total Fixed Assets old plus new is $650,000, and Net Assets | |
after charging $75,000 Depreciation is $575,000. | |
5. Account Payable is 10% of $1,000,000. | |
6. Notes Payable is same $350,000 as given in proforma. | |
7. Accruals are same $50,000 as given in proforma. | |
8. Long term Debt were $150,000 and $100,000 is retired | |
or repaid. Thus, Balance is $50,000. | |
9. Common stock is same $180,000 as in proforma. | |
10 Retained Earning is the difference between the total | |
assets minus Total Liabilities minus Common stock. That | |
is = $1,110,000 - $550,000 - $180,000 = $380,000 | |
11. Retained Earning Beg. Bal. for past years is: | |
$380,000 -$40,000 (profit-4% of$1,000,000) + $45,000 = | |
$385,000 | |
Ending Retained Earning = $385,000 + $40,000 -$45,000 = | |
$380,000 |
Use the following information to create a pro forma balance sheet for General Talc Mines as of De...
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