Amounts are in thousands of dollars (except number of shares and price per share: Kiwi Fruit Company...

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Finance

Amounts are in thousands of dollars (except number of sharesand price per share:
Kiwi Fruit Company Balance Sheet
  Cash and equivalents$570
  Operating assets650
  Property, plant, and equipment2,700
  Other assets110
  Total assets$4,030
  Current liabilities920
  Long-term debt1,280
  Other liabilities120
  Total liabilities$2,320
  Paid in capital$340
  Retained earnings1,370
  Total equity$1,710
  Total liabilities and equity$4,030
Kiwi Fruit Company Income Statement
  Net sales7,800
  Cost of goods sold-5,900
  Gross profit1,900
  Operating expense-990
  Operating income910
  Other income105
  Net interest expense-200
  Pretax income$815
  Income tax-285
  Net income$530
  Earnings per share$2
  Shares outstanding265,000
  Recent price$34.50
Kiwi Fruit Company Cash Flow Statement
  Net income$530
  Depreciation and amortization175
  Changes in operating assets-90
  Changes in current liabilities-120
  Operating cash flow$495
  Net additions to properties$180
  Changes in other assets-80
  
  Investing cash flow$100
  Issuance/redemption of long-term debt($190)
  Dividends paid-220
  Financing cash flow($410)
  Net cash increase$185

Prepare a pro forma income statement, balance sheet, and cashflow statement for Kiwi Fruit assuming a 10 percent increase insales. (Leave no cells blank - be certain to enter \"0\"wherever required. Negative amounts should be indicated by a minussign. Input all amounts as thousands of dollars.Round earnings per share to 2 decimal places. Omit the \"$\" sign inyour response.)

Answer & Explanation Solved by verified expert
4.3 Ratings (724 Votes)

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

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