The financial statements for the year ended June 30, 2011, are given below for Morgan Construction Company. The firm’s sales are projected to grow at a rate of 27percent next year, and all financial statement accounts will vary directly with sales. Morgan Construction Company Balance Sheet for Year Ended June 30, 2011 Assets: Liabilities and Stockholders’ Equity: Cash $3,349,239 Accounts payable $9,041,679 Accounts receivables 5,830,754 Notes payable 4,857,496 Inventories 22,267,674 Total current assets $31,447,667 Total current liabilities $13,899,175 Net fixed assets 43,362,482 Long-term debt 29,731,406 Other assets 1,748,906 Common stock 19,987,500 Retained earnings 12,940,974 Total assets $76,559,055 Total liabilities & equity $76,559,055 Morgan Construction Company Income Statement Year Ended June 30, 2011 Revenues $193,212,500 Costs 145,265,625 EBITDA $47,946,875 Depreciation 23,318,750 EBIT $24,628,125 Interest 11,935,869 EBT $12,692,256 Taxes (35%) 4,442,290 Net income $8,249,966 Based on that projection, develop a pro forma balance sheet and an income statement for the 2012 fiscal year. (Round answers to the nearest whole dollar, e.g. 5,275.) Morgan Construction Company Pro Forma Balance Sheet for Year Ended June 30, 2012 Assets: Liabilities and Stockholders’ Equity: Cash $ Accounts payable $ Accounts receivables Notes payable Inventories Total current assets $ Total current liabilities $ Net fixed assets Long-term debt Other assets Common stock Retained earnings Total assets $ Total liabilities & equity $ Morgan Construction Company Pro Forma Income Statement Year Ended June 30, 2012 Revenues $ Costs EBITDA $ Depreciation EBIT $ Interest EBT $ Taxes (35%) Net income

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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The financial statements for the year ended June 30, 2011, are given below for Morgan Construction Company. The firm’s sales are projected to grow at a rate of 27percent next year, and all financial statement accounts will vary directly with sales.

Morgan Construction Company Balance Sheet for Year Ended June 30, 2011
Assets:		Liabilities and Stockholders’ Equity:
Cash	$3,349,239	Accounts payable	$9,041,679
Accounts receivables	5,830,754	Notes payable	4,857,496
Inventories	22,267,674
Total current assets	$31,447,667	Total current liabilities	$13,899,175

Net fixed assets	43,362,482	Long-term debt	29,731,406
Other assets	1,748,906	Common stock	19,987,500
		Retained earnings	12,940,974
Total assets	$76,559,055	Total liabilities & equity	$76,559,055

Morgan Construction Company Income Statement Year Ended June 30, 2011

Revenues	$193,212,500
Costs	145,265,625
EBITDA	$47,946,875
Depreciation	23,318,750
EBIT	$24,628,125
Interest	11,935,869
EBT	$12,692,256
Taxes (35%)	4,442,290
Net income	$8,249,966

Based on that projection, develop a pro forma balance sheet and an income statement for the 2012 fiscal year. (Round answers to the nearest whole dollar, e.g. 5,275.)

Morgan Construction Company Pro Forma Balance Sheet for Year Ended June 30, 2012
Assets:		Liabilities and Stockholders’ Equity:
Cash	$	Accounts payable	$
Accounts receivables		Notes payable
Inventories
Total current assets	$	Total current liabilities	$

Net fixed assets		Long-term debt
Other assets		Common stock
		Retained earnings
Total assets	$	Total liabilities & equity	$

Morgan Construction Company Pro Forma Income Statement Year Ended June 30, 2012

Revenues	$
Costs
EBITDA	$
Depreciation
EBIT	$
Interest
EBT	$
Taxes (35%)
Net income	$

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