The proforma income statement is prepared as below:
Kiwi Fruit Company |
Proforma Income Statement |
Net Sales
[7,800*(1+10%)] |
8,580 |
Cost of
Goods Sold [5,900*(1+10%)] |
-6,490 |
Gross
Profit |
2,090 |
Operating
Expense |
-990 |
Operating
Income |
1,100 |
Other
Income |
105 |
Net
interest expense |
-200 |
Pretax
Income |
1,005 |
Income
Tax (285/815*1,005) |
-351 |
Net
income |
654 |
Earnings
per share |
2.47 |
Shares
outstanding |
265,000 |
_____
The proforma cash flow statement is given as below:
Kiwi Fruit Company |
Proforma Cash Flow Statement |
Net
Income |
654 |
Depreciation and Amortization (No Change) |
175 |
Change in
Operating Assets (No Change) |
-90 |
Change in
Current Liabilities (No Change) |
-120 |
Operating
Cash Flow |
619 |
|
|
Net
Additions to Property |
0 |
Change in
Other Assets |
0 |
Investing
Cash Flow |
0 |
|
|
Issuance/Redemption of Long-Term Debt |
0 |
Dividends
Paid |
-220 |
Financing
Cash Flow |
-220 |
Net Cash Increase |
$399 |
_____
The proforma balance sheet is given as follows:
Kiwi Fruit Company |
Proforma Balance Sheet |
Cash and
Equivalents (570+399) |
969 |
Operating
Assets (650+90) |
740 |
Property,
Plant, and Equipment (2,700-175) |
2,525 |
Other
Assets |
110 |
Total Assets |
$4,344 |
|
|
Current
Liabilities (920-120) |
800 |
Long-Term
Debt |
1,280 |
Other
Liabilities |
120 |
Total
Liabilities |
2,200 |
Paid in
Capital |
340 |
Retained
Earnings (1,370 + 654 - 220) |
1,804 |
Total
Equity |
2,144 |
Total Liabilities and Equity |
$4,344 |