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A financial manager at General Talc Mines has gathered the financial data essential to prepare a pro forma balance sheet for cash and profit planning purposes for the coming year ended December 31, 2004. Using the percent-of-sales method and the following financial data, prepare the pro forma balance sheet in order to answer the following multiple choice questions.
A. The firm estimates sales of $1,000,000.
B. The firm maintains a cash balance of $25,000.
C. Accounts receivable represents 15 percent of sales. D. Inventory represents 35 percent of sales.
E. A new piece of mining equipment costing $150,000 will be purchased in 2004.
Total depreciation for 2004 will be $75,000.
F. Accounts payable represents 10 percent of sales.
G. There will be no change in notes payable, accruals, and common stock.
H. The firm plans to retire a long term note of $100,000. I. Dividends of $45,000 will be paid in 2004.
J. The firm predicts a 4 percent net profit margin.
Balance Sheet
General Talc Mines
December 31, 2003
Assets
-The pro forma current liabilities amount is___________
Corporate Veil
A legal concept that separates the actions and liabilities of a corporation from those of its shareholders or directors.
Corporate Property
Assets owned by a corporation, including real estate, intellectual property, and physical goods.
Shareholders
Individuals or entities that own shares in a corporation, reflecting a proportion of ownership in the company.
Corporate
Pertaining to a corporation, which is a legal entity recognized by law as separate from its owners and having its own rights, privileges, and liabilities.
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