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solina solina
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7 years ago
Amalgamated Enterprises is planning to purchase some new equipment. With this new equipment, the company expects sales to increase from $8,000,000 to $10,000,000. A portion of the financing for the purchase of the equipment will come from a $1,000,000 new common stock issue. The company knows that current assets, fixed assets, accounts payable, and accrued expenses increase in direct proportion with sales. The company's net profit margin on sales is 8%, and the company plans to pay 40% of its after-tax earnings in dividends. A copy of the company's current balance sheet is given below:

Amalgamated Enterprises Balance Sheet
Current assets    $3,000,000
Fixed assets    12,000,000
Total assets    $15,000,000
Accounts payable    $4,000,000
Accrued expenses    1,000,000
Long-term debt    3,000,000
Common stock    2,000,000
Retained earnings    5,000,000
Total liabilities and net worth    $15,000,000

Prepare a pro forma balance sheet for Amalgamated for next year using the percent-of-sales method and the information provided above.
Textbook 
Financial Management: Principles and Applications

Financial Management: Principles and Applications


Edition: 13th
Authors:
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Heavy Heart Thank you bio-forums! Heavy Heart
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vanrheevanrhee
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7 years ago
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solina Author
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7 years ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
kiara23247843
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Yesterday
Good timing, thanks!
aznzergs
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2 hours ago
Helped a lot
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