Prepare a pro forma balance sheet

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Question - Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 48,800 Costs 34,800 Taxable income $ 14,000 Taxes (22%) 3,080 Net income $ 10,920 Dividends $ 2,517 Addition to retained earnings 8,403 The balance sheet for the Heir Jordan Corporation follows. HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 2,650 Accounts payable $ 2,400 Accounts receivable 3,600 Notes payable 5,300 Inventory 9,000 Total $ 7,700 Total $ 15,250 Long-term debt $ 24,000 Owners' equity Fixed assets Common stock and paid-in surplus $ 18,000 Net plant and equipment $ 38,400 Retained earnings 3,950 Total $ 21,950 Total assets $ 53,650 Total liabilities and owners' equity $ 53,650

Prepare a pro forma balance sheet, assuming an increase in sales of 12 percent, no new external debt or equity financing, and a constant payout ratio. Calculate the EFN.

Reference no: EM133074416

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