Am. 326. Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next.Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($ thousands)INCOME STATEMENTSalesCost of goods soldOperating expenseDepreciation expenseInterest expenseEarnings before taxTaxNet incomeCurrent assetsNet fixed assetsTotal assetsCurrent liabilitiesLong-term debtOwner's equityTotal liabilities & equityActual2021$ 8,7006,600780250Net fixed assets in 2022Owner's equity in 2022External funding required for 2022901,060371$ 689Universal Products CompanyFinancial Statements, 2021 and Pro Forma 2022 ($thousands)BALANCE SHEETActual2021Forecast2022$ 9,1007,100788260200840294$ 5463,440,0005,583,000 X757,000 X$ 4,2003,000$ 7,200$ 1,1907805,310$ 7,200Forecast2022$ 4,450a. Assume that Universal plans to purchase $700,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022.What would be its forecast for net fixed assets in 2022?$ 1,310500b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equityduring 2022. What would be its forecast for owner's equity in 2022?c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022?Answer is complete but not entirely correct.

Owner's equity refers to the assets of the company after deducting the liabilities. It shows the…

Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2822 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Actual 2021 $ 8,700 6,600 700 250 90 1,060 371 $689 Forecast 2022 $ 9,100 7,100 788 260 200 848 294 $ 546

Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2822 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Actual 2021 $ 8,700 6,600 700 250 90 1,060 371 $689 Forecast 2022 $ 9,100 7,100 788 260 200 848 294 $ 546

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 12P

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Current assets Net fixed assets Universal Products Company Financial Statements, 2021 and Pro Forma 2822 ($ thousands) BALANCE SHEET Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity Actual 2021 Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022 $ 2,900 2,000 $ 4,900 $ 1,060 600 3,240 $4,900 Forecast 2022 $ 3,150 $ 1,180 500 a. Assume that Universal plans to purchase $400,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022. What would be its forecast for net fixed assets in 2022? b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equity during 2022. What would be its forecast for owner's equity in 2022? c. Given the assumptions in questions (a) and (b), what is Universal's projected external funding required for 2022?
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