D Homework Chapter 4 External Financing Needex CNot secure 10.00 points Consider
ID: 1170337 • Letter: D
Question
D Homework Chapter 4 External Financing Needex CNot secure 10.00 points Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes) Income Statement Sales Balance Sheet $40,000 Assets $26,000 Debt 7,000 Equity 19,000 34,160 Net income 5,840 Tota $26,000 $26,000 The company has predicted a sales increase of 20 percent. It has predicted that every item on the balance sheet will increase by 20 percent as wel Create the pro forma statements and reconcile them. (Input all amounts as positive values. Do not round intermediate calculations.) Pro forma income statement Pro forma balance sheet 48000 40992 Assets 31200 Debt Equity Total Sales Costs 8400 22800 Net income 7008 Total 31200 31200 What is the plug variable? The plug variable is dividends paidn the amount of S 1696 isnt it References eBook & Resources Worksheet Leaming Objective: 04-01 How to apply the percentage of sales method.Explanation / Answer
Income Statement
Sales
$48,000
Less : Costs
$40,992
Net Income
$7,008
Pro forma Balance Sheet
Assets
$31,200
Debt
$8,400
Equity
$22,800
Total
$31,200
Total
$31,200
The plug variable is “ dividends paid “ in the amount of “ $3,208 “
Calculation of Dividend Paid
Equity increased = $22,800 – 19,000 = $3,800
Net income is $7,008, but Equity increased only by $3,800
Therefore, Dividend Paid = $7,008 – 3,800 = $3,208
Dividends paid is the plug variable.
Income Statement
Sales
$48,000
Less : Costs
$40,992
Net Income
$7,008
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