Question

In: Statistics and Probability

Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes): Income Statement...

Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes):

Income Statement
  Sales $38318
  Costs $24483
Balance Sheet
  Assets $56924   Debt $37803
Equity ?

The company has predicted a sales increase of 14 percent. It has predicted that every item on the balance sheet will increase by 14 percent as well.

What is the pro forma net income?

Solutions

Expert Solution

answer:

given data,

  • the sales is $38318
  • the costs is $24483​​​​​​​
  • the predicted sales are increase is 14 %
  • the balance sheet will increase is 14 %

to find the  pro forma of the net income is ....?

the probability is shown in the below step by step,

here we are know as the values is already,

now we are know as the formula is

the pro forma net income ( sales * increase % ) - ( costs * increase % )

now substitute the values in the above formula

( 38318 * 1.4 ) - ( 24483 * 1.4 )

53645.2 - 34276.2

19369.0

therefore the 19369

so finally the pro forma of the  net income is 19369

19369

orchestra answered 1 year ago
Next > < Previous

Related Solutions

Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes): Income Statement   Sales $38,804   Costs $22,685 Balance Sheet   Assets $54,048   Debt $38,755 Equity ? The company has predicted a sales increase of 15 percent. It has predicted that every item on the balance sheet will increase by 15 percent as well. How much dividends should be paid to reconcile the pro forma balance sheet?
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes):   Income Statement...
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes):   Income Statement Balance Sheet   Sales $25,000     Assets $10,000     Debt $4,600     Costs 13,200     Equity 5,400     Net income $11,800     Total $10,000     Total $10,000   Phillips has predicted a sales increase of 11 percent. It has predicted that every item on the balance sheet will increase by 11 percent as well. Required: Calculate the dividend paid. (Do not round your intermediate calculations.)
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes):   Income Statement...
Consider the following simplified financial statements for the Phillips Corporation (assuming no income taxes):   Income Statement Balance Sheet   Sales $27,000     Assets $10,800     Debt $4,600     Costs 12,800     Equity 6,200     Net income $14,200     Total $10,800     Total $10,800   Phillips has predicted a sales increase of 10 percent. It has predicted that every item on the balance sheet will increase by 10 percent as well. Required: Calculate the dividend paid. (Do not round your intermediate calculations.) Multiple Choice $15,000 $14,969 $14,975 $14,981 $23,740
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet   Sales $ 46,100   Assets $ 24,300   Debt $ 6,300   Costs 39,630   Equity 18,000     Net income $ 6,470     Total $ 24,300     Total $ 24,300 The company has predicted a sales increase of 10 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.    Prepare...
Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes) Income Statement...
Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes) Income Statement Balance Sheet   Sales $ 45,700   Assets $ 21,900   Debt $ 5,900   Costs 40,100   Equity 16,000     Net income $ 5,600     Total $ 21,900     Total $ 21,900 The company has predicted a sales increase of 6 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare...
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement...
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet   Sales $ 39,600   Assets $ 23,800   Debt $ 6,800   Costs 31,800   Equity 17,000     Net income $ 7,800     Total $ 23,800     Total $ 23,800 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.    Prepare...
1. Consider the following simplified financial statements for Fire Dragon Corporation (assume no income taxes): Income...
1. Consider the following simplified financial statements for Fire Dragon Corporation (assume no income taxes): Income Statement Sales $32,000 Costs $24,400 Net Income $7,600 Balance Sheet Assets $25,300 Total $25,300 Debt $5,800 Equity $19,500 Total $25,300 The company has forecast a sales increase of 15 percent. Fire Dragon has also predicted that every item on the balance sheet will increase by 15 percent. Create the pro forma statements and reconcile them. What is the plug variable here? 2. Now let’s...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 12,700 Cost of goods sold 3,810 Other expenses 4,112 Depreciation 2,368 Earnings before interest and taxes (EBIT) $ 2,410 Interest expense 660 Income before tax $ 1,750 Taxes (at 30%) 525 Net income $ 1,225 Dividends $ 826    BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 84 $...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,900 Cost of goods sold 4,460 Other expenses 4,197 Depreciation 2,758 Earnings before interest and taxes (EBIT) $ 2,485 Interest expense 725 Income before tax $ 1,760 Taxes (at 30%) 528 Net income $ 1,232 Dividends $ 936 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 97 $ 166...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in...
Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 13,000 Cost of goods sold 3,960 Other expenses 4,037 Depreciation 2,458 Earnings before interest and taxes (EBIT) $ 2,545 Interest expense 675 Income before tax $ 1,870 Taxes (at 30%) 561 Net income $ 1,309 Dividends $ 856 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 87 $ 156...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT