Question;Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided below to prepare the financial plans. The following financial data are also available:(1) The firm has estimated that its sales for 2013 will be $900,000.(2) The firm expects to pay $35,000 in cash dividends in 2013.(3) The firm wishes to maintain a minimum cash balance of $30,000.(4) Accounts receivable represent approximately 18% of annual sales.(5) The firm's ending inventory will change directly with changes in sales in 2013.(6) A new machine costing $42,000 will be purchased in 2013. Total depreciation for 2013 will be $17,000.(7) Accounts payable will change directly in response to changes in sales in 2013.(8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement.(9) Marketable securities, other current liabilities, long-term debt, and common stock wll remain unchanged.a. Prepare a pro forma income statement for the year ended December 31, 2013, using the percent-of-sales method.b. Prepare a pro forma balance sheet dated December 31, 2013, using the judgmental approach.c. Analyze these statements, and discuss the resulting external financing required.
Paper#52072 | Written in 18-Jul-2015Price : $26