Please help. Please show each step and explain the process. Consider the followi
ID: 2809744 • Letter: P
Question
Please help. Please show each step and explain the process.
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):
Income Statement
Balance Sheet
Sales
$
46,100
Assets
$
24,300
Debt
$
6,300
Costs
39,630
Equity
18,000
Net income
$
6,470
Total
$
24,300
Total
$
24,300
The company has predicted a sales increase of 10 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.
Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.)
Pro forma income statement
Pro forma balance sheet
Sales
$
Assets
$
Debt
$
Costs
Equity
Net income
$
Total
$
Total
$
What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)
External financing needed
$
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):
Explanation / Answer
Pro-forma Income Statement:
Sales = 46,100 * 1.10 = 50,710
Costs = 39,630 * 1.10 = 43,593
Net Income = 50,710 - 43,593
Net Income = 7,117
Dividend = 7,117/ 2 = 3,558.50
Next year equity = 18,000 + 3,559
Next year equity = 21,559
Pro-forma Balance Sheet Statement:
Assets = 24,300 * 1.10
Assets = 26,730
Debt = 6,300
Equity = 21,559
EFN = 26,730 - 21,559 - 6,300
EFN = -1,129