Reference no: EM132463194
Peabody? & Peabody has 2019
- 2019 sales of $ 10.4
- $10.4 million.
It wishes to analyze expected performance and financing needs for 2021
2021 long dash
- 2 years ahead. Given the following? information, respond to parts a. and b.
Point ?(1) The percents of sales for items that vary directly with sales are as? follows: Accounts? receivable; 11.3 %
11.3%?, ?Inventory; 18.8 %
18.8%?; Accounts? payable, 14.7 %
14.7%?; Net profit? margin, 4.0 %
4.0%.
Point ?(2) Marketable securities and other current liabilities are expected to remain unchanged.
Point ?(3) A minimum cash balance of $ 485 comma 000
$485,000 is desired.
Point ?(4) A new machine costing $ 646 comma 000
$646,000 will be acquired in 2020
2020?, and equipment costing $ 852 comma 000
$852,000 will be purchased in 2021
2021. Total depreciation in 2020
2020 is forecast as $ 287 comma 000
$287,000?, and in 2021
2021 $ 394 comma 000
$394,000 of depreciation will be taken.
Point ?(5) Accruals are expected to rise to $ 495 comma 000
$495,000 by the end of 2021
2021.
Point ?(6) No sale or retirement of? long-term debt is expected.
Point ?(7) No sale or repurchase of common stock is expected.
Point ?(8) The dividend payout of 50 %
50% of net profits is expected to continue.
Point ?(9) Sales are expected to be $ 11.5
$11.5 million in 2020
2020 and $ 13.0
$13.0 million in 2021
2021.
Point ?(10) The December? 31, 2019
2019?, balance sheet is here LOADING...
Question a. Prepare a pro forma balance sheet dated December? 31, 2021
2021.
Question b. Discuss the financing changes suggested by the statement prepared in part ?(a?).
Question a. Prepare a pro forma balance sheet dated December? 31, 2021
2021.
Question b. To calculate the net fixed assets for December? 31, 2021
2021?, use the following? formula:
- Net fixed assets equals Beginning gross fixed assets plus Fixed assets outlays minus Depreciation expense
- Net fixed assets=Beginning gross fixed assets+Fixed assets outlays-Depreciation expense.
?Therefore,
- Net fixed assets equals $ 3 comma 995 comma 000 plus $ 646 comma 000 plus $ 852 comma 000 minus $ 287 comma 000 minus $ 394 comma 000 equals $ 4 comma 812 comma 000
- Net fixed assets=$3,995,000+$646,000+$852,000-$287,000-$394,000=$4,812,000.
- The net fixed assets for December? 31, 2021
- 2021 are $ 4 comma 812 comma 000
- $4,812,000.
Question 1: To calculate the common equity for December? 31, 2021
2021?, use the following? formula:
Start 2 By 1 Matrix
1st Row 1st Column Common equity equals Beginning common equity plus Net profit after taxes 2020 and 2021
2nd Row 1st Column minus Dividends paid 2020 and 2021 EndMatrix
- Common equity=Beginning common equity+Net profit after taxes 2020 and 2021 -Dividends paid 2020 and 2021