Return to the Income Statement and Balance Sheet of Dominant Retailers, Inc for Last Year and Two Years Ago to calculate DRI’s Pro Forma Financial Statements for next year. Assume that DRI’s projected Sales will increase by 30% over last year’s sales, and that Cost of Goods Sold and Cash Operating Expenses will maintain their same ratio to Sales as the average ratio of Last Year and Two Years Ago. DRI will purchase $100,000 in additional Gross Fixed Assets which will be depreciated by straight line depreciation over 10 years to zero salvage value which will increase Depreciation Expense by $10,000 over last year. Please assume that interest expense will stay the same as last year and that the marginal tax rate remains at 25%. What is DRI’s Pro Forma Net Income to the nearest cent given all the assumptions in this problem? Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Dominant Retailers, Inc.
Dominant Retailers, Inc.
Last Year Two Years Ago Sales S 242,290.00$ 226,954.00 Cost of Goods Sold 176.900.00 S 170.382.00 Gross Profit 65,390.00S 56,572.00 Cash Operating Expenses 32,590.00$ 29,779.00 Depreciation S 15.250.00S 13.375.00 EBIT S 17,550.00$ 13.418.00 Interest Expense S 5,689.00 S 5,245.00 EBT s 11,861.00S 8,173.00 Taxes at 25% 's 2.965.25 s 2,043.25 Net Income S 8,895.75S 6,129.75 13. Return to the Income Statement and Balance Sheet of Dominant Retailers, Inc for Last Year and Two Years Ago to calculate DRI's Pro Forma Financial Statements for next year. Assume that DRI's projected Sales will increase by 30% over last year's sales, and that Cost of Goods Sold and Cash Operating Expenses will maintain their same ratio to Sales as the average ratio of Last Year and Two Years Ago. DRI will purchase $100,000 in additional Gross Fixed Assets which will be depreciated by straight line depreciation over 10 years to zero salvage value which will increase Depreciation Expense by S10,000 over last year. Please assume that interest expense will stay the same as last year and that the marginal tax rate remains at 25%. What is DRI's Pro Forma Net Income to the nearest cent given all the assumptions in this problem? Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box
Last Year
Two Years Ago
Assets: Cash Accounts Receivable Inventory Short Term Investments Total Current Assets Gross Fixed Assets Accumulated Depreciation Net Fixed Assets Total Assets
S 13,700.00$ 10,203.00 S 42,850.00S 42,110.00 S 166,510.00$ 179,070.00 15.340.00S 10,280.00 S 238.400.00 S 241,663.00 S 460.820.00 S 427,060.00 S 166.850.00 S 152.860.00 S 293.970.00 S 274.200.00 532,370.00$ 515,863.00
Liabilities & Owner's Equity: Accounts Payable Accrued Expenses
S
57,483.00 S 16,480.00 S
58,455.00 15,292.00
S
Short Term Notes Payable
S
40,810.00S
30.290.00 114,773.00 S 104,037.00
Total Current Liabilities
Long Term Debt Total Liabilities
S 123,412.00 S
123.868.00 S 238,185.00 S 227,905.00 S 25,575.00 S 25,575.00
Common Stock ($1 Par Value) Additional Paid In Capital Retained Earnings Total Owner's Equity Total Liabilitities &Owner's Equity
S 73,400.00 S S 195.210.00 S S 294,185.00$ $ 532,370.00$
73,400.00 188.983.00 287,958.00 515,863.00
