Fin1000_module06_forecasting below is the income statement and

fin1000_module06_forecasting   
Below is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical statements and the                        
additional information provided, construct the firm’s pro forma income statement and balance sheet for 2014.                       
Blue Bill Corporation         
Income Statement       
For the year ended 2013       
    2012    2013
Revenue    $60,000     $63,000
Cost of goods sold    42,000     44,100
Gross margin    18,000     18,900
SG&A expense    6,000     6,300
Depreciation expense    1,800     2,000
Earnings Before Interest and Taxes (EBIT)    10,200     10,600
Interest expense    1,500     1,800
Taxable income    8,700     8,800
Income Tax Expense    3,045     3,080
Net income    5,655     5,720
Dividends    750     800
To retained earnings    $4,905     $4,920
       
Additional income statement information:       
Sales will increase by 5% in 2014 from 2013 levels.        
COGS and SG&A will be the average percent of sales for the last 2 years.        
Depreciation expense will increase to $2,200.       
Interest expense will be $1,900.       
The tax rate is 35%.       
Dividend payout will increase to $850.       
       
       
       
       
Blue Bill Corporation       
Balance Sheet       
December 31, 2013       
    2013   
Current assets       
Cash    $8,000    
Accounts receivable    3,150    
Inventory    9,450    
Total current assets     20,600    
Property, plant, and equipment (PP&E)     28,500    
Accumulated depreciation     16,400    
Net PP&E     12,100    
Total assets    $32,700    
       
Current liabilites       
Accounts payable    $3,780    
Bank loan (10%)    3,200    
Other current liabilities    1,250    
Total current liabilities    8,230    
Long-term debt (12%)    4,800    
Common stock    1,250    
Retained earnings    18,420    
Total liabilities and equity    $32,700    
       
Additional balance sheet information:       
The minimum cash balance is 12% of sales.       
Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013.       
$8,350 of new PP&E will be purchased in 2014.       
Other current liabilities will be 3% of sales in 2014.       
There will be no changes in the common stock or long-term debt accounts.       
The plug figure (the last number entered that makes the balance sheet balance) is bank loan.        

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