Question

In: Finance

Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020...

Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $ 1.64 million. Interest expense is expected to remain unchanged at $ 38 comma 000 , and the firm plans to pay $ 74 comma 000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019 , is given LOADING... , along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why.

etroline Manufacturing

Income Statement

for the Year Ended December 31, 20192019

Sales revenue

$1,396,000

Less: Cost of goods sold

917,000

Gross profits

$479,000

Less: Operating expenses

110,000

Operating profits

$369,000

Less: Interest expense

38,000

Net profits before taxes

$331,000

Less: Taxes

(rate equals 40 %rate=40% )

132,400

Net profits after taxes

$198,600

Less: Cash dividends

65,000

To retained earnings

$133,600

Metroline Manufacturing

Breakdown of Costs and Expenses

into Fixed and Variable Components

for the Year Ended December 31, 20192019

Cost of goods sold

Fixed cost

$216,000

Variable cost

701,000

Total cost

$917,000

Operating expenses

Fixed expenses

$35,000

Variable expenses

75,000

Total expenses

   $110,000

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

I DID SIMILAR SUM EARLIER, WHERE ANSWER WAS ASKED IN DOLLARS. SO ROUNDED TO ZERO DECIMAL

ANS % IN 4 DECIMALS


Related Solutions

Pro forma income statement. The marketing department of Metroline Manufacturing estimates that its sales in 2020...
Pro forma income statement. The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.64 million. Interest expense is expected to remain unchanged at $37,000​, and the firm plans to pay $69,000 in cash dividends during 2020. Metroline​ Manufacturing's income statement for the year ended December​ 31, 2019​, is given below​, along with a breakdown of the​ firm's cost of goods sold and operating expenses into their fixed and variable components. Income Statement Sales Revenue 1,405,000...
Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020...
Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.63 million. Interest expense is expected to remain unchanged at $32,000​,and the firm plans to pay $72,000 in cash dividends during 2020. Metroline​ Manufacturing's income statement for the year ended December​ 31, 2019​, is given​, along with a breakdown of the​ firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the ​percent-of-sales method to prepare...
Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020...
Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million. Interest expense is expected to remain unchanged at $34,000, and the firm plans to pay $74,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December31, 2019i is given (See belong Graph) ,along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales...
Assignment 2 P4-15 Pro forma income statement???The marketing department of Metroline Manufacturing estimates that its sales...
Assignment 2 P4-15 Pro forma income statement???The marketing department of Metroline Manufacturing estimates that its sales in 2016 will be $1.56 million. Interest expense is expected to remain unchanged at $33,000?, and the firm plans to pay $66,000 in cash dividends during 2016. Metroline? Manufacturing's income statement for the year ended December? 31, 2015, is given Metroline Manufacturing breakdown of Costs and Expenses into Fixed and Variable Components for the Year Ending December 31, 2015 Cost of goods sold   Fixed...
P4-15 Pro forma income statement The marketing department of Metroline Manufactur ing estimates that its sales...
P4-15 Pro forma income statement The marketing department of Metroline Manufactur ing estimates that its sales in 2016 will be $1.5 million. Interest expense is expected to remain unchanged at $35,000, and the firm plans to pay $70,000 in cash divi dends during 2016. Metroline Manufacturing’s income statement for the year ended December 31, 2015, and a breakdown of the firm’s cost of goods sold and operating expenses into their fixed and variable components are given below. a. Use the...
The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million.
Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million. Interest expense is expected to remain unchanged at $ 36, 000 and the firm plans to pay $75,000 in cash dividends during 2020. Metroline​ Manufacturing's income statement for the year ended December​ 31, 2019​, is given. Along with a breakdown of the​ firm's cost of goods sold and operating expenses into their fixed and variable components.a. Use the ​percent-of-sales method...
The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million....
The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million. Interest expense is expected to remain unchanged at $39,000 , and the firm plans to pay $71,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019 , is given , along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare...
The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.54 million....
The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.54 million. Interest expense is expected to remain unchanged at $40,000​, and the firm plans to pay $69,000 in cash dividends during 2020.Metroline​ Manufacturing's income statement for the year ended December​ 31,2019​, is given, along with a breakdown of the​ firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the ​percent-of-sales method to prepare a pro forma income statement...
The marketing department of Metroline Manufacturing estimates that its sales in 20202020 will be $ 1.51$1.51...
The marketing department of Metroline Manufacturing estimates that its sales in 20202020 will be $ 1.51$1.51 million. Interest expense is expected to remain unchanged at $ 36 comma 000$36,000​, and the firm plans to pay $ 66 comma 000$66,000 in cash dividends during 20202020. Metroline​ Manufacturing's income statement for the year ended December​ 31, 20192019​, is given Metroline Manufacturing Income Statement for the Year Ended December​ 31, 20192019 Copy to Clipboard + Open in Excel + Sales revenue $ 1...
Chapter 4: 3. Fire Corp financial statements: Pro forma income statement Pro forma balance sheet Sales...
Chapter 4: 3. Fire Corp financial statements: Pro forma income statement Pro forma balance sheet Sales $      32,000 Assets $25,300 Debt $        5,800 Costs $        24,400 ________ Equity $        19,500 Net income $        7,600 Total $25,300 Total $      25,300 It expects 15% sales increase. It also predicts every item on the balance sheet will increase by 15% as well. 1.Create the pro forma statements. 2. What’s the plug variable here? 3. If Fire Corp pays half of income as dividend,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT