Forecasted Balance Sheet, Income Statement, and Statement of Cash Flows
Balance Sheet |
2008 |
Cash |
$10 |
Other current assets |
250 |
Property, plant, and equipment, net |
800 |
Total assets |
$1,060 |
Accounts payable |
$ 100 |
Bank loans payable |
700 |
Total stockholders’ equity |
260 |
Total liabilities and stockholders’ equity |
$1,060 |
Income Statement |
2008 |
Sales |
$1,000 |
Cost of goods sold |
750 |
Gross profit |
$250 |
Depreciation expense |
40 |
Other operating expenses |
80 |
Operating profit |
$130 |
Interest expense |
70 |
Income before income taxes |
$60 |
Income taxes |
20 |
Net income |
$40 |
In addition, Ryan has assembled the following forecasted information regarding 2009.
(a) Sales are expected to increase to $1,500.
(b) Ryan expects to become more efficient at utilizing its property, plant, and equipment in 2009.Therefore, Ryan expects that the sales increase will not require any overall increase in property, plant, and equipment. Accordingly, the year 2009 property, plant, and equipment balance is expected to be $800.
(c) Ryan’s bank has approved a new long term loan of $200. This loan will be in addition to the existing loan payable.
(d) Ryan Company does not anticipate paying any dividends in the coming year.
Instructions:
1. Prepare a forecasted balance sheet for 2009. Clearly state what assumptions you make.
2. Prepare a forecasted income statement for 2009. Clearly state what assumptions you make.
3. Prepare a forecasted statement of cash flows for 2009. Use the indirect method of reporting cash from operating activities.