CROSBY, INCORPORATED
2023 Income Statement
Sales $ 753,000
Costs 588,000
Other expenses 24,000
Earnings before interest and taxes $ 141,000
Interest paid 20,000
Taxable income $ 121,000
Taxes (25%) 30,250
Net income $ 90,750
Dividends $ 28,133
Addition to retained earnings 62,617
CROSBY, INCORPORATED
Balance Sheet as of December 31, 2023
Assets Liabilities and Owners' Equity
Current assets Current liabilities
Cash $ 21,240 Accounts payable $ 55,400
Accounts receivable 44,180 Notes payable 14,600
Inventory 97,960 Total $ 70,000
Total $ 163,380 Long-term debt $ 136,000
Fixed assets Owners' equity
Net plant and equipment $ 429,000 Common stock and paid-in surplus $ 117,500
Accumulated retained earnings 268,880
Total $ 386,380
Total assets $ 592,380 Total liabilities and owners' equity $ 592,380
In 2023, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company.
Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as
well.
Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.
Answer is complete but not entirely correct.
Pro Forma Balance Sheet
Assets Liabilities and Owners' Equity
Current assets Current liabilities
Cash $ 25,488 Accounts payable $ 66,480
Accounts receivable 53,016 Notes payable 17,520 X
Inventory 117,552 Total $ 84,000 X
Total $ 196,056 Long-term debt $ 136,000
Owners' equity
Fixed assets Common stock and paid-in surplus $ 117,500
Net plant and equipment $ 429,000 Accumulated retained earnings 346,091
Total $ 463,591
Total assets $ 625,056 Total liabilities and owners' equity $ 561,191 X
What is the EFN?
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to
the nearest whole number, e.g. 32.
Answer is complete but not entirely correct.
EFN $ 63,867 X
