Question

Pro forma income statement. Given the income statement in the popup​ window, for California Cement Company for 2013 and an expected sales growth rate of 6.61 % for​ 2014, prepare a pro forma income statement for 2014.

First, find the percentage of each income statement line from 2013 as a percent of sales. ​(Round to three decimal​ places.)

Sales Revenue $22,811,000 ____ %

Cost of goods sold $-11,638,000 ___%

Selling, general, and administrative expenses $-3,973,000 ____%

Depreciation expenses $ -1,369,000 ____%

EBIT $5,831,000 ____%

Interest expense $-173,000 ____%

Taxable income $5,658,000 ____%

Taxes $-2,479,594 ____%

Net Income $3,178,406 ___ %

What is the sales forecast for 2014?

$___ (Round to the nearest dollar.)

Sales Revenue $ ____ 100.00%

Cost of goods sold $ ____ 51.019%

Selling, general, and administrative expenses $____ 17.417%

Depreciation expenses $ ____ 6.001%

EBIT $ ____ 25.562%

Interest expense $ ____ 0.758%

Taxable income $ ____ 24.804%

Taxes $ ____ 10.870%

Net Income $ ____ 13.934%

Answer 1

Income statement for 2013

Sales Revenue	$22,811,000	100 %
Cost of goods sold	$-11,638,000	51.019 %
Selling, general, and administrative expenses	$-3,973,000	17.417 %
Depreciation expenses	$ -1,369,000	6.001 %
EBIT	$5,831,000	25.562 %
Interest expense	$-173,000	0.758 %
Taxable income	$5,658,000	24.804 %
Taxes	$-2,479,594	10.870 %
Net Income	$3,178,406	13.934 %

The sales forecast for 2014 = $22,811,000 * (1 + 0.0661) = $24,318,807

Income statement for 2014

Sales Revenue	$24,318,807	100 %
Cost of goods sold	$-12,407,212	51.019 %
Selling, general, and administrative expenses	$- 4,235,607	17.417 %
Depreciation expenses	$-1,459,372	6.001 %
EBIT	$6,216,373	25.562 %
Interest expense	$-184,337	0.758 %
Taxable income	$6,032,037	24.804 %
Taxes	$-2,643,454	10.870 %
Net Income	$3,388,583	13.934 %