Pro Forma Income Statements for The Year Ending October 31, 1994 Pro Forma Balan
ID: 2559298 • Letter: P
Question
Pro Forma Income Statements for The Year Ending October 31, 1994 Pro Forma Balance Sheets As At October 31,1994 000's (except ratios) Alternative 3 audit cost of $250,000 pay underwriting fee of 6% of gross proceeds underwrite shares at $13.50 at 2M shares 000's (except revenue per visit 46,618 22,713 23,904 4,190 Current Assets 583 Metropolitan Bank to finance until polic stock off eringat rate of Prime Prime 5.75% Operating Exepnses 2.5% Accounts Receivable 7,293 11,092 Earmings from Resort Operations Inventory-Equipment for Sale Total Current Assets Property, Buidlings, Equipment, Net Phase 2 Expansion, Net 46,600 24,167 9,300 29,520 120,679 466 EBITDA 17,797 Deferred Development Costs Total Assets 4,133 500 Amortization of Goodwil iabilities: Current Liabilities 7,534 3,538 3,143 3,000 17,215 EBIT 13,164 4,188 8,976 Accounts Payable Deferred Revenue Operating Loan Current Portion of Long-Term Debt EBT Total Current Liabilities Tax @ 40% Long-Term Debt Earnings After Taxes Total Uabilities 3,305- 1,616 Deferred Taxes INCR/(DECR) In Retained Earnings 770 Retained Earning Paid-In Capital 20,104 18,600 8,704 Total equity New Financing Total Liabilities &Equity; Net Income EPS: Weighted Average of Comman Shares Outstanding 120,679Explanation / Answer
1) Assuming audit is directly related to the IPO it should not be charged as an expense but reduced from the paid-up capital with no impact on the net income.
2) Since underwriting commission is directly attributable to the IPO (equity) it should be reduced from the paid-up capital with no impact on the net income.
3) The financing interest expense is @8.25% which should be charged to the income statement on a pro-rata basis depending upon when the loan has been issued and when repaid.
In the absence of few details I am unable to give you the exact number of net income. Hope the concept helps!
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