Footnote Heading 3 Heading 4 Heading Paragraph Styles Use the following income s
ID: 2797296 • Letter: F
Question
Footnote Heading 3 Heading 4 Heading Paragraph Styles Use the following income statement and balance sheet for Jim's Espresso Income Statement Balance Sheet Sales 200,000 Assets Costs Except Depreciation (100,000)Cash and Equivalents 15,000 EBITDA 00,000 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 Pretax Income 93.600 Total Assets 31,000 Income Tax (32,760) Net Incme 60,840 Liabilities and Equity Accounts Payable 1,500 shegersk.Explanation / Answer
Under percentage of sales method , Each historical expense is converted into a percentage of net sales, and these percentages are then applied to the forecasted sales level in the budget period. Current Cost except depreciation % to sales level = $100000 / $200000 = 50% Current depreciation % to sales level = $6000 / $200000 = 3% Current net income % to sales level = $60840 / $200000 = 30.42% Current Cash % to sales level = $15000 / $200000 = 7.50% Current Accounts Receivable % to sales level = $2000 / $200000 = 1% Current Inventory % to sales level = $4000 / $200000 = 2% Current Property,plant and equipment % to sales level = $10000 / $200000 = 5% Answer a Forcasted sales level = $200000*110% = $2,20,000 Costs = $220000 * 50% = $1,10,000 Depreciation = $220000 * 3% = $6600 Net Income = $220000 * 30.42% = $66924 Cash = $220000 * 7.50% = $16500 Accounts Receivables = $220000 * 1% = $2200 Inventory = $220000 * 2% = $4400 Property,Plant and equipment = $220000 * 5% = $11000 Answer b Jim's net new financing = Forecasted total assets - Forecasted total liabilities - Forecasted Stockholders equity Jim's net new financing = $34100 - $5650 - $32192 = -$3742