Reference no: EM132490273

Question 1: According to the information below and the financial statement given for year 2019, please prepare pro forma Balance sheet and Income Statement for Capstone Corporate for year 2020 to 2022

1. Projected Growth Rate is 10% for the next 3 years (Assume all current assets varies directly with sales but not fixed asset. Account payables also vary with sales).
2. Also, suppose in the next 3 year, you've decided that your corporation will not raise any External financing, that is, after sustain the asset growth, all the extra earnings should be paid out as dividend.
3. There will be no change in the amount the long-term debt and common stock in the next three years either. The average interest rate is 5% on long-term debt and notes payable (in this example, the interest rate stays in same throughout the three-year planning horizon.)
4. Depreciation is constant and $250,000 per year throughout the three-year planning horizon, and the corporate tax rate is 34%.
5. Financial Statement information can be found under the Financial Statement Tab of the excel file

Attachment:- prepare.zip