The most recent financial statements for Moose Tours, Inc., appear below. Sales
ID: 2423353 • Letter: T
Question
The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2012 are projected to grow by either 15, 20 or 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.
MOOSE TOURS, INC.
2011 Income Statement
Sales
$
755,000
Costs
590,000
Other expenses
11,000
Earnings before interest and taxes
$
154,000
Interest expense
12,000
Taxable income
$
142,000
Taxes
56,800
Net income
$
85,200
Dividends
$
34,080
Addition to retained earnings
51,120
MOOSE TOURS, INC.
Balance Sheet as of December 31, 2011
Assets
Liabilities and Owners' Equity
Current assets
Current liabilities
Cash
$
21,440
Accounts payable
$
55,600
Accounts receivable
33,760
Notes payable
14,800
Inventory
70,720
Total
$
70,400
Total
$
125,920
Long-term debt
$
138,000
Owners’ equity
Fixed assets
Common stock and paid-in surplus
$
124,000
Net plant and equipment
$
240,000
Retained earnings
33,520
Total
$
157,520
Total assets
$
365,920
Total liabilities and owners' equity
$
365,920
Complete the pro forma income statements below. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. (e.g., 32))
MOOSE TOURS, INC.
Pro Forma Income Statement
15 % Sales Growth
20 % Sales Growth
25 % Sales Growth
Sales
$
$
$
Costs
Other expenses
EBIT
$
$
$
Interest
Taxable income
$
$
$
Taxes (40%)
Net income
$
$
$
Dividends
$
$
$
Add to RE
Calculate the EFN for 15, 20 and 25 percent growth rates. (Negative amount should be indicated by a minus sign.Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. (e.g., 32))
15%
20%
25%
EFN
$
$
$
The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2012 are projected to grow by either 15, 20 or 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.
Explanation / Answer
Answer:
MOOSE TOURS, INC. Pro Forma Income Statement Particulars 15% Sales Growth 20% Sales Growth 25% Sales Growth Sales 868250 906000 943750 Costs 678500 708000 737500 Other expenses 12650 13200 13750 EBIT 177100 184800 192500 Interest 12000 12000 12000 Taxable income 165100 172800 180500 Taxes (40%) 66040 69120 72200 Net income 99060 103680 108300 Dividend 39624 41472 43320 Add to RE 59436 62208 64980