A Financial Manager at General Talc Mines Has Gathered the Financial

question 45

Multiple Choice

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
$\begin{array}{lr}\hline\text { Cash } & \$ 25,000 \\\text { Accounts receivable } & 120,000 \\\text { Inventories } & 300,000 \\& -\ldots . . . \\\quad \text { Total current assets } & \$ 445,000 \\\text { Net fixed assets } & \$ 500,000\\& -\ldots . . . \\\text { Total assets }&\$945,000\\\\\text { Liabilities and stockholders' equity }\\\hline\text { Accounts payable } & \$ 80,000 \\\text { Notes payable } & 350,000 \\\text { Accruals } & 50,000\\& -\ldots . . . \\\text { Total current liabilities } & \$ 480,000 \\\text { Long-term debts } & 150,000\\\text { Total liabilities } & \$ 630,000 \\\text { Stockholders' equity } & \\\text { Common stock } & \$ 180,000 \\\text { Retained earnings } & 135,000\\\text { Total stockholders' equity } & \$ 315,000 \\\text { Total liabilities and stockholders' equity } & \$ 945,000\end{array}$
-The pro forma net fixed assets amount is__________

• A) $575,000
• B) $500,000
• C) $650,000
• D) $600,000

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Definitions:

Cultural Pluralism

A societal approach that recognizes and appreciates the diversity of cultures within a community or nation while advocating for mutual respect and peaceful coexistence.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by prejudice towards other groups.

Cultural Superiority

The belief that one's own culture is superior to others, often leading to discrimination and prejudice against people from different cultures.

Ethnocentrism

The practice of evaluating other cultures according to preconceptions originating in the standards and customs of one's own culture.