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The most recent financial statements for Crosby, Incorporated, follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income Dividends Addition to retained earnings Inventory Total Current assets Cash Accounts receivable CROSBY, INCORPORATED 2020 Income Statement Total assets Sales Costs Fixed assets Net plant and equipment $227,000 Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income $ 32,940 40,926 Dividends Add to RE $ 25,940 35,430 72,050 $ 133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $360,420 $ 770,000 626,000 32,500 $ 111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 Total $ 158,520 Total liabilities and owners' equity $360,420 Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth

The most recent financial statements for Crosby, Incorporated, follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income Dividends Addition to retained earnings Inventory Total Current assets Cash Accounts receivable CROSBY, INCORPORATED 2020 Income Statement Total assets Sales Costs Fixed assets Net plant and equipment $227,000 Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income $ 32,940 40,926 Dividends Add to RE $ 25,940 35,430 72,050 $ 133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $360,420 $ 770,000 626,000 32,500 $ 111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 Total $ 158,520 Total liabilities and owners' equity $360,420 Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter13: Financial Statement Analysis
Section: Chapter Questions
Problem 13.14E
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Ee 247.

Calculate the EFN for 10, 15 and 40 percent growth rates. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
Transcribed Image Text:Calculate the EFN for 10, 15 and 40 percent growth rates. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
The most recent financial statements for Crosby, Incorporated, follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income CROSBY, INCORPORATED 2020 Income Statement Dividends $ 32,940 Addition to retained earnings 40,926 Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $227,000 Sales Costs Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income Dividends Add to RE $ 25,940 35,430 72,050 $133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $ 770,000 626,000 32,500 $111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 $ 158,520 $360,420 Total liabilities and owners' equity $360,420 Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Total Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth
Transcribed Image Text:The most recent financial statements for Crosby, Incorporated, follow. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt- equity ratio is held constant. Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (22%) Net income CROSBY, INCORPORATED 2020 Income Statement Dividends $ 32,940 Addition to retained earnings 40,926 Current assets Cash Accounts receivable Inventory Total Total assets Fixed assets Net plant and equipment $227,000 Sales Costs Other expenses EBIT Interest paid Taxable income Taxes (22%) Net income Dividends Add to RE $ 25,940 35,430 72,050 $133,420 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets $ 770,000 626,000 32,500 $111,500 16,800 $ 94,700 20,834 $ 73,866 10% Sales Growth Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 113,000 45,520 $ 158,520 $360,420 Total liabilities and owners' equity $360,420 Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Total Pro Forma Income Statement $ 64,200 19,700 $ 83,900 $ 118,000 15% Sales Growth 40% Sales Growth
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