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The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales 749,000 Costs 584,000 20,000 Other expenses Earnings before interest and $ 145,000 taxes Interest paid 16,000 Taxable income Taxes (21%) $ 129,000 27,090 Net income $ 101,910 $ 31,592 Addition to retained earnings 70,318 Dividends CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Current assets Cash $20,840 43.780 $ 55,000 Accounts receivable 14,200 $ 69,200 $ 132,000 Inventory 93,960 Total $ 158,580 Long-term debt Total Fixed assets Owners' equity Common stock and paid-in surplus Net plant and equipment $ 425,000 $ 115,500 Retained earnings 266,880 $ 382,380 $ 583,580 Total liabilities and owners' equity $ 583,580 Total Total assets In 2020, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes (21%) Net income

The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales 749,000 Costs 584,000 20,000 Other expenses Earnings before interest and $ 145,000 taxes Interest paid 16,000 Taxable income Taxes (21%) $ 129,000 27,090 Net income $ 101,910 $ 31,592 Addition to retained earnings 70,318 Dividends CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Current assets Cash $20,840 43.780 $ 55,000 Accounts receivable 14,200 $ 69,200 $ 132,000 Inventory 93,960 Total $ 158,580 Long-term debt Total Fixed assets Owners' equity Common stock and paid-in surplus Net plant and equipment $ 425,000 $ 115,500 Retained earnings 266,880 $ 382,380 $ 583,580 Total liabilities and owners' equity $ 583,580 Total Total assets In 2020, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes (21%) Net income

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter3: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 19SP
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The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales 749,000 584,000 20,000 Costs Other expenses Earnings before interest and taxes $ 145,000 Interest paid 16,000 $ 129,000 Taxable income Taxes (21%) 27,090 Net income $ 101,910 Dividends $ 31,592 Addition to retained earnings 70,318 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current assets Current liabilities Accounts payable Notes payable $ 20,840 $ 55,000 14,200 Cash Accounts receivable 43,780 Inventory 93,960 Total $ 69,200 $ 158,580 Long-term debt $ 132,000 Total Fixed assets Owners' equity Common stock and paid-in surplus Net plant and equipment $ 425,000 $ 115,500 Retained earnings 266,880 Total $ 382,380 Total assets $ 583,580 Total liabilities and owners' equity $ 583,580 In 2020, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taven Taxes (21%) Net income Pro Forma Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts payable Accounts receivable Notes payable Inventory Total current liabilities 24 O Long-term debt Owners' equity Total current assets Fixed assets Common stock and paid-in surplus Retained eamings Net plant and equipment Total owner's equity 24 Total assets O Total liabilities and owners' equity What is the EFN? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32. A negative answer should be indicated by a minus sign.) EFN
Transcribed Image Text:The most recent financial statements for Crosby Incorporated, follow. Sales for 2021 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. CROSBY, INCORPORATED 2020 Income Statement Sales 749,000 584,000 20,000 Costs Other expenses Earnings before interest and taxes $ 145,000 Interest paid 16,000 $ 129,000 Taxable income Taxes (21%) 27,090 Net income $ 101,910 Dividends $ 31,592 Addition to retained earnings 70,318 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current assets Current liabilities Accounts payable Notes payable $ 20,840 $ 55,000 14,200 Cash Accounts receivable 43,780 Inventory 93,960 Total $ 69,200 $ 158,580 Long-term debt $ 132,000 Total Fixed assets Owners' equity Common stock and paid-in surplus Net plant and equipment $ 425,000 $ 115,500 Retained earnings 266,880 Total $ 382,380 Total assets $ 583,580 Total liabilities and owners' equity $ 583,580 In 2020, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taven Taxes (21%) Net income Pro Forma Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts payable Accounts receivable Notes payable Inventory Total current liabilities 24 O Long-term debt Owners' equity Total current assets Fixed assets Common stock and paid-in surplus Retained eamings Net plant and equipment Total owner's equity 24 Total assets O Total liabilities and owners' equity What is the EFN? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32. A negative answer should be indicated by a minus sign.) EFN
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