Please show your work for each answer. It will help as a study guide. Thanks. Pl
ID: 2424404 • Letter: P
Question
Please show your work for each answer. It will help as a study guide. Thanks.
Please use the following projections for Top-A1 Inc.: Total sales of$147,000 Cost of goods sold equal to 76.9 percent of sales Tax rate of 35 percent Beginning equity of $45,300 Beginning inventory of $11,300 Age of ending inventory of 61 days Minimum cash balance of $9.100 Accounts receivable of 32 days Fixed assets of $56,600 Accounts payable of 36 days Create a pro-forma balance sheet. Calculate the long-term debt as the balancing amount.Explanation / Answer
Proforma Balance Sheet:
Total sales $ 147,000. Cost of goods sold + total expenses = 91.6%
Therefore earnings before taxes = 100% - 91.6% = 8.4% of 147,000 = $ 12, 348
Hence, net income after tax = 12, 348 x 0.65 = 8,026
Beginning balance in equity $ 45,300. Hence ending balance in equity = 45,300 + 8,026 =$ 53,326
Accounts receivable = 147,000 / 365 x 32 = $ 12,888
Assets $ Cash 9,100 Accounts receivable 12,888 Inventory 18,892 Fixed assets 56,600 Total assets 97,480 Liabilities Accounts payable 13,281 Long-term debt 30,873 Total liabilities 44,154 Equity 53,326 Total liabilities and equity 97,480