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Consider the following income statement for the Heir Jordan Corporation:

  

HEIR JORDAN CORPORATION
Income Statement
  Sales         $ 43,500  
  Costs           34,100  
         
 
  Taxable income         $ 9,400  
  Taxes (24%)           2,256  
         
 
  Net income         $ 7,144  
         
 
      Dividends $ 2,515          
      Addition to retained earnings   4,629          

  

The balance sheet for the Heir Jordan Corporation follows.

  

HEIR JORDAN CORPORATION
Balance Sheet
Assets   Liabilities and Owners’ Equity  
  Current assets         Current liabilities      
    Cash $ 2,550       Accounts payable $ 2,400  
    Accounts receivable   3,800       Notes payable   5,100  
         
 
    Inventory   9,000         Total $ 7,500  
 
   
 
      Total $ 15,350     Long-term debt $ 24,000  
 
   
 
          Owners’ equity      
  Fixed assets           Common stock and paid-in surplus $ 16,000  
    Net plant and equipment $ 38,000       Retained earnings   5,850  
 
   
 
              Total $ 21,850  
         
 
  Total assets $ 53,350     Total liabilities and owners’ equity $ 53,350  
 
   
 

 

Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Calculate the EFN. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Prepare a pro forma balance sheet, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and

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Consider the following income statement for the Heir JordanCorporation: HEIR JORDAN CORPORATION Income Statement Sales $46,500 Costs 36,100 Taxable income $ 10,400 Taxes (30%) 3,120 Netincome $ 7,280 Dividends $ 3,100 Addition to retained earnings4,180 The balance sheet for the Heir Jordan Corporation follows.HEIR JORDAN CORPORATION Balance Sheet Assets Liabilities andOwners’ Equity Current assets Current liabilities Cash $ 2,600Accounts payable $ 2,400 Accounts receivable 3,700 Notes payable5,200 Inventory 9,000 Total $ 7,600 Total $ 15,300 Long-term debt $24,000 Owners’ equity Fixed assets Common stock and paid-in surplus$ 17,000 Net plant and equipment $ 38,200 Retained earnings 4,900Total $ 21,900 Total assets $ 53,500 Total liabilities and owners’equity $ 53,500 Prepare a pro forma balance sheet, assuming a 10percent increase in sales, no new external debt or equityfinancing, and a constant payout ratio. (Do not round intermediatecalculations and round your answers to 2 decimal places, e.g.,32.16.) HEIR JORDAN CORPORATION Pro Forma Balance Sheet AssetsLiabilities and Owners’ Equity Current assets Current liabilitiesCash $ Accounts payable $ Accounts receivable Notes payableInventory Total $ Total $ Long-term debt $ Owners’ equity Fixedassets Common stock and paid-in surplus Net plant and equipment $Retained earnings Total $ Total assets $ Total liabilities andowners’ equity $ Calculate the EFN. (Negative amount should beindicated by a minus sign. Do not round intermediate calculationsand round your answer to 2 decimal places, e.g., 32.16.) EFN $

Use the following balance sheet and income statement tocalculate the firm's return on equity (net income / commonequity):

Balance Sheet

Income Statement

Assets:

Cash

$3,000

Sales (all credit)

$85,000

Accounts Receivable

5,000

Cost of Goods Sold

(51,000)

Inventories

6,500

Land

20,000

Operating Expenses

(15,000)

Other Fixed Assets

18,000

Depreciation

(1,000)

Liabilities & Owners' Equity

Interest Expense

(3,000)

Accounts Payable

4,000

Long Term Debt

26,700

Taxes

(5,100)

Common Stock

5,000

Paid in Capital

12,000

Retained Earnings

4,800
50.4%
45.4%
41.6%
58.9%
58.2%
Just Dew It Corporation reports the following balance sheet information for 2014 and 2015.


JUST DEW IT CORPORATION
2014 and 2015 Balance Sheets
Assets Liabilities and Owners’ Equity
2014 2015 2014 2015
Current assets Current liabilities
Cash $ 6,600 $ 12,750 Accounts payable $ 50,000 $ 68,750
Accounts receivable 12,200 14,250 Notes payable 19,000 35,500
Inventory 78,200 95,250
Total $ 97,000 $ 122,250 Total $ 69,000 $ 104,250
Long-term debt $ 48,000 $ 45,000
Owners’ equity
Common stock and paid-in surplus $ 50,000 $ 50,000
Retained earnings 233,000 300,750
Net plant and equipment $ 303,000 $ 377,750 Total $ 283,000 $ 350,750
Total assets $ 400,000 $ 500,000 Total liabilities and owners’ equity $ 400,000 $ 500,000

Prepare the 2014 and 2015 common-size balance sheets for Just Dew It. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

2014 2015
Assets
Current assets
Cash $ 6,600 % $ 12,750 %
Accounts receivable 12,200 % 14,250 %
Inventory 78,200 % 95,250 %
Total $ 97,000 % $ 122,250 %
Fixed assets
Net plant and equipment $ 303,000 % $ 377,750 %
Total assets $ 400,000 % $ 500,000 %
Liabilities and Owners’ Equity
Current liabilities
Accounts payable $ 50,000 % $ 68,750 %
Notes payable 19,000 % 35,500 %
Total $ 69,000 % $ 104,250 %
Long-term debt $ 48,000 % $ 45,000 %
Owners' equity
Common stock and paid-in surplus $ 50,000 % $ 50,000 %
Accumulated retained earnings 233,000 % 300,750 %
Total $ 283,000 % $ 350,750 %
Total liabilities and owners' equity $ 400,000 % $ 500,000 %

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