Table 4.5 a Financial Manager at General Talc Mines Has Gathered the Gathered

question 159

Multiple Choice

Table 4.5
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, 2015. 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 2010.
Total depreciation for 2010 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 2015.
(j) The firm predicts a 4 percent net profit margin.
Balance Sheet
General Talc Mines
December 31, 2014
-The pro forma total liabilities amount is ________. (See Table 4.5)

• A) $500,000
• B) $550,000
• C) $700,000
• D) $650,000

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Definitions:

Mechanism

A system or structure that performs a specific function or facilitates a process.

Team Autonomy

The degree to which a team is self-directed and free to make decisions within the scope of their goals and tasks.

Hackman

Refers to J. Richard Hackman, an influential researcher in the fields of organizational behavior and team dynamics, known for his work on team effectiveness.

Quality-Control Team

A specialized group within a company or organization focused on ensuring that products or services meet established standards of quality.