Muggles Company

2014 Actual Income Statement Sales (all credit) Cost of goods sold Gross profit Operating expenses Operating income Interest expense Net income before taxes Taxes (40%) Net income Dividends Change in Retained Earnings Assets Cash Accounts receivable Inventory Current assets Net plant and equipment Total assets Liabilities & Equity Accounts Payable Notes payable current (9%) Current liabilities Bonds (8 1/3%) Total liabilities Owners equity Common stock Retained earnings Total owners equity Total liabilities and equity AFN 1450 850 600 240 360 60 300 120 180 81 99 1st Pass 1740 1020 720 288 432 60 372 149 223 100 123 2015 2nd Pass 1740 1020 720 288 432 93 339 136 203 92 112 Final Pass 1740 1020 720 288 432 93 339 136 203 92 112
1st Pass Forecast Sales grow are forecast to grow by 20% in 2015. Operating expenses, assets and spontaneous liabilities grow at the same rate as sales. Dividends are 45% of net income. Develop a first pass income statement and balance sheet, showing the Additional Financing Needed. Dont incorporate financing feedback. 2nd Pass Forecast Assume the company uses short term financing at 9% interest to satisfy the AFN you identified in your first pass forecast. Reforecast the income statement and balance sheet to incorporate this financing feedback and show the new AFN. Final Pass Add the AFN to Notes Payable and don't change interest expense from the 2nd pass.

150 425 625 1200 1400 2600

180 510 750 1440 1680 3120

180 510 750 1440 1680 3120

180 510 750 1440 1680 3120

150 150 300 600 900 900 800 1700 2600

180 150 330 600 930 900 923 1823 2753 367

180 517 697.24 600 1297.24 900 912 1812 3109 11

180 528 708 600 1308 900 912 1812 3120 0