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Question;Q16. Cooley Textile?s 2000 financial statements are shown below.;Balance Sheet;Assets;$ (000);Liabilities & Equity;$ (000);Cash (3%);1,080;Accounts payable (20%);4,320;Accounts receivable (18%);6,480;Accruals (7%);2,880;Inventory (25%);9,000;Notes payable;2,100;Total current assets;16,560;Total current liabilities;9,300;Fixed assets (35%);12,600;Mortgage Bonds;3,500;Total debt;12,800;Common stock;3,500;Retained earnings;12,860;29,160;29,160;Income Statement;$ (000);sales;36,000;Operating cost (90.11%);32,440;EBIT;3,560;Interest;560;EBT;3,000;Tax (40% of EBT);1,200;Net income;1,800;Dividend (45% of net income);810;Retained earnings;990;Suppose 2001 sales are projected to increase by 15% over 2000 sales.;Assume that the company was operating at full capacity in 2000, that it cannot;sell off any of its fixed assets, and that any required financing will be;borrowed as notes payable. Also assume that assets, spontaneous liabilities;and operating costs are expected to increase in proportion to sales. Use the;percentage of sales method to develop a pro forma balance sheet and income;statement for December 31, 2001. Use the pro forma income statement to;determine the addition to retained earnings. Interest, Mortgage Bonds and;Common Stocks will remain content.;Q17.;Balance Sheet;Assets;$ (000);Liabilities & Equity;$ (000);Cash (5%);1,800;Accounts payable (20%);7,200;Accounts receivable (30?%);10,800;Accruals (7%);3,472;Inventory (35%);12,600;Notes payable;2,520;Total current assets;25,200;Total current liabilities;13,192;Fixed assets (60%);21,600;Mortgage Bonds;5,000;Total debt;18,192;Common stock;2,000;Retained earnings;26,608;46,800;46,800;Income Statement;$ (000);sales;36,000;Operating cost (85.5%);30,783;EBIT;5,217;Interest;1,017;EBT;4,200;Tax (40% of EBT);1,680;Net income;2,520;Dividend (45% of net income);1,512;Retained earnings;1,008;Suppose 2001 sales are projected to;increase by 20% over 2000 sales. Assume that the company was operating at full;capacity in 2000, that it cannot sell off any of its fixed assets, and that any;required financing will be borrowed as notes payable. Also assume that assets;spontaneous liabilities, and operating costs are expected to increase in;proportion to sales. Use the percentage of sales method to develop a pro forma;balance sheet and income statement for December 31, 2001. Use the pro forma;income statement to determine the addition to retained earnings. Interest;Mortgage Bonds and Common Stocks will remain content.;Q18. Using the data below calculate the firm?s current and quick ratios for;each year.;ITEM;2006;2007;2008;2009;TOTAL CURRENT ASSETS;16,950;21,900;22,500;27,000;TOTAL CURRENT LIABELITIES;9,000;12,600;12,600;17,400;INVENTORY;6,000;6,900;6,900;7,200

 

Paper#44955 | Written in 18-Jul-2015

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