Pro Forma Balance Sheet Assignment | Top Universities
Leonard Industries wishes to prepare a pro forma balance sheet for December 31,
20202020.
The firm expects
20202020
sales to total
$ 3 comma 000 comma 000$3,000,000.
The following information has been gathered.
(1) A minimum cash balance of
$ 49 comma 600$49,600
is desired.
(2) Marketable securities are expected to remain unchanged.
(3) Accounts receivable represent
9.9 %9.9%
of sales.
(4) Inventories represent
11.9 %11.9%
of sales.
(5) A new machine costing
$ 89 comma 500$89,500
will be acquired during
20202020.
Total depreciation for the year will be
$ 32 comma 100$32,100.
(6) Accounts payable represent
14.4 %14.4%
of sales.
(7) Accruals, other current liabilities, long-term debt, and common stock are expected to remain unchanged.
(8) The firm's net profit margin is
4.1 %4.1%,
and it expects to pay out
$ 69 comma 900$69,900
in cash dividends during
20202020.
(9) The December 31,
20192019,
balance sheet follows
Leonard Industries Balance Sheet December 31, 20192019
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Assets
Liabilities and Stockholders' Equity
Cash
$ 45 comma 100$45,100
Accounts payable
$ 394 comma 600$394,600
Marketable securities
14 comma 70014,700
Accruals
59 comma 90059,900
Accounts receivable
255 comma 200255,200
Other current liabilities
30 comma 00030,000
Inventories
339 comma 900339,900
Total current liabilities
$ 484 comma 500$484,500
Total current assets
$ 654 comma 900$654,900
Long-term debt
350 comma 900350,900
Net fixed assets
599 comma 900599,900
Common stock
199 comma 700199,700
Retained earnings
219 comma 700219,700
Total assets
$ 1 comma 254 comma 800$1,254,800
Total liabilities and stockholders' equity
$ 1 comma 254 comma 800$1,254,800
.
a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31,
20202020,
for Leonard Industries.
b. How much, if any, additional financing will Leonard Industries require in
20202020?
Discuss.
c. Could Leonard Industries adjust its planned
20202020
dividend to avoid the situation described in part
b?
Explain how.
a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31,
20202020,
for Leonard Industries.Complete the assets part of the pro forma balance sheet for Leonard Industries for December 31,
20202020
below: (Round to the nearest dollar.)
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Pro Forma Balance Sheet
Leonard Industries
December 31, 2020
Assets
Current assets
Cash
$
Marketable securities
Accounts receivable
Inventories
Total current assets
$
Net fixed assets
Total assets
$. Get Accounting homework help today
