Construct the pro formas for 2013 and calculate total assets

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Reference no: EM131975994

Question

Major Manuscripts, Inc. 2012 Income Statement
Net sales	$	9,500
Cost of goods sold		7,715
Depreciation		380
Earnings before interest and taxes	$	1,405
Interest paid		50
Taxable Income	$	1,355
Taxes		508
Net income	$	847
Dividends	$	198

Major Manuscripts, Inc. 2012 Balance Sheet
	2012			2012
Cash	$	4,100	Accounts payable	$	3,790
Accounts rec.		1,050	Long-term debt		230
Inventory		4,400	Common stock	$	4,500
Total	$	9,550	Retained earnings		6,130
Net fixed assets		5,100
Total assets	$	14,650	Total liabilities & equity	$	14,650

Major Manuscripts, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant.

In 2013, no new equity will be raised and sales are projected to increase by 10 percent. Construct the pro formas for 2013 and answer the following question.

1)Projected total assets= $________

2)Projected retained earnings= $________

3)Additional new debt required= $________

Reference no: EM131975994

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