Pro Forma Income Statement and Balance Sheet

Pro Forma Income Statement and Balance Sheet								
								
								
Below is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical statements and the 								
additional information provided, construct the firm's pro forma income statement and balance sheet for 2014.								
								
								
Blue Bill Corporation  								
Income Statement								
For the year ended 2013								
	2012	2013						
Revenue	$60,000 	$63,000 						
Cost of goods sold	42,000 	44,100 						
Gross margin	18,000 	18,900 						
SG&A expense	6,000 	6,300 						
Depreciation expense	1,800 	2,000 						
Earnings Before Interest and Taxes (EBIT)	10,200 	10,600 						
Interest expense	1,500 	1,800 						
Taxable income	8,700 	8,800 						
Income Tax Expense	3,045 	3,080 						
Net income	5,655 	5,720 						
Dividends	750 	800 						
To retained earnings	$4,905 	$4,920 						
								
Additional income statement information:								
Sales will increase by 5% in 2014 from 2013 levels. 								
COGS and SG&A will be the average percent of sales for the last 2 years. 				COGS	70.00%			
Depreciation expense will increase to $2,200.				SG & A	10.00%			
Interest expense will be $1,900.								
The tax rate is 35%.								
Dividend payout will increase to $850.								
								
								
								
								
Blue Bill Corporation								
Balance Sheet								
December 31, 2013								
	2013							
Current assets								
Cash	$8,000 							
Accounts receivable	3,150 							
Inventory	9,450 							
Total current assets	 20,600 							
Property, plant, and equipment (PP&E)	 28,500 							
Accumulated depreciation	 16,400 							
Net PP&E	 12,100 							
Total assets	$32,700 							
								
Current liabilites								
Accounts payable	$3,780 							
Bank loan (10%)	3,200 							
Other current liabilities	1,250 							
Total current liabilities	8,230 							
Long-term debt (12%)	4,800 							
Common stock	1,250 							
Retained earnings	18,420 							
Total liabilities and equity	$32,700 							
								
Additional balance sheet information:								
The minimum cash balance is 12% of sales.								
Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013.								
$8,350 of new PP&E will be purchased in 2014.								
Other current liabilities will be 3% of sales in 2014.								
There will be no changes in the common stock or long-term debt accounts.								
The plug figure (the last number entered that makes the balance sheet balance) is bank loan.