Pro forma balance sheet Peabody & Peabody has 2019 sales of $10.8 million. It wi

Question

Pro forma balance sheet Peabody & Peabody has 2019 sales of $10.8 million. It wishes to analyze expected performance and financing needs for 2021-2 years ahead. Given the following information, respond to parts a. and b. (1 The percents of sales for items that vary directly with sales are as follows: Accounts receivable, 1 1 6% Inventory: 176%; Accounts payable 13.6%; Net profit margin, 2 9 (2) Marketable securities and other current liabilities are expected to remain unchanged. (3) A minimum cash balance of $485.000 is desired (4) A new machine costing $654,000 will be acquired in 2020, and equipment costing $852,000 will be purchased in 2021. Total depreciation in 2020 is forecast as $286,000, and in 2021 $386,000 of depreciation will be taken. (5) Accruals are expected to rise to $495,000 by the end of 2021 (6) No sale or retirement of long-term debt is expected. (7) No sale or repurchase of common stock is expected. (8) The dividend payout of 50% of net profits is expected to continue. (9) Sales are expected to be $11.9 million in 2020 and $11.9 million in 2021 10) The December 31, 2019, balance sheet is here EE a. Prepare a pro forma balance sheet dated December 31, 2021 h Dieeisee the finanrinn channee cunnectod e the etatament nrenard in nart fal a. Prepare a pro forma balance sheet dated December 31, 2021 Complete the assets part of the pro forma balance sheet for Peabody & Peabody for December 31, 2021 below. (Round to the nearest dollar.) Pro Forma Balance Sheet Peabody & Peabody December 31, 2021 Assets Current assets Cash Marketable securities Accounts receivable Total current assets Net fixed assets Total assets

Explanation / Answer

Proforma Balance sheet - 31 Dec 2021

Working Notes:

Assets Cash 485000 Marketable Securities 202000 Accounts Receivable 1380400 Inventories 2094400 Total current Assets 4161800 Net Fixed Assets 4831000 Total assets 8992800

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