Question

PLEASE ANSWER IN EXCEL FORMAT THAT IS EASILY UNDERSTOOD ONLY, THANK YOU!! (no writing please)

[EXCEL] Percent of sales: Cattail Corporation's financial statements for the fiscal year just ended are shown below:

Cattail Corporation

Income Statement

Net Sales: $1500

Costs: $350

Net Income: $1150

Balance Sheet

Assets $700 = $700

Debt $600

Equity 100 = $700

Cattail management expects sales to increase by 14 percent next year. Assume that the financial statement accounts vary directly with changes in sales and that management has no financing plan at this time. Given this information, develop a pro forma income statement for Cattail for the next fiscal year.

Part 2

Given the data for Cattail Corporation in Problem 9, if you assume that all balance sheet items also vary with the change in sales, develop a pro forma balance sheet for Cattail for the next fiscal year. Assuming that the firm did not sell or repurchase stock, what is the cash dividend implied by the pro forma income statement and balance sheet?

Answer 1

Income Statement
	Current fiscal Year	Next fiscal Year
Net Sales	1500	1710
Cost	350	399
Net Income	1150	1311
Balance Sheet
Assets	700	798
Debt	600	684
Equity	100	114

Please refer following table for formula:

Equity for current fiscal year=100

Equity projected for next fiscal year=114

increase in equity in the next fiscal year=14

Net income is adjusted for dividend payout and the remaining amount after dividend payout will be added to equity as retained earnings

Net income in current fiscal year is $1150 and an increase in equity in next fiscal year is by $14(retained earning)

Dividend implied by the pro forma income statement and balance sheet =1150-14=$1136