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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 2022 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity Actual 2021 $ 6,900 5,400 Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022 700 250 90 460 161 $ 299 Actual 2021 $3,600 Forecast 2022 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($) thousands) BALANCE SHEET 3,000 $6,600 $ 1,130 700 4,770 $ 6,600 $ 7,300 5,500 700 260 80 760 266 $ 494 Forecast 2022 $ 3,850 $ 1,250 500 a. Assume that Universal plans to purchase $600,000 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?

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 2022 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity Actual 2021 $ 6,900 5,400 Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022 700 250 90 460 161 $ 299 Actual 2021 $3,600 Forecast 2022 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($) thousands) BALANCE SHEET 3,000 $6,600 $ 1,130 700 4,770 $ 6,600 $ 7,300 5,500 700 260 80 760 266 $ 494 Forecast 2022 $ 3,850 $ 1,250 500 a. Assume that Universal plans to purchase $600,000 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?

Intermediate Financial Management (MindTap Course List)
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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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 2022 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity Actual 2021 $ 6,900 5,400 Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022 700 250 90 460 161 $ 299 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($) thousands) BALANCE SHEET Actual 2021 $3,600 3,000 $6,600 $ 1,130 Forecast 2022 700 4,770 $ 6,600 $ 7,300 5,500 700 260 80 760 266 $ 494 Forecast 2022 $ 3,850 $ 1,250 500 a. Assume that Universal plans to purchase $600,000 In fixed assets during 2022 and to dispose of no fixed assets during 2022 What would be its forecast for net fixed assets in 2022? b. Assume that Universal plans to have a dividend payout ratio of 50 percent in 2022 and will neither sell nor repurchase equity during 2022. What would be its forecast for owner's equity in 2022? c. Given the assumptions in questions (a) and (b). what is Universal's projected external funding required for 2022?
Transcribed Image Text:Universal Products Company has almost finished its pro forma financial statements for 2022, as shown next. Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($ thousands) INCOME STATEMENT Sales Cost of goods sold Operating expense Depreciation expense Interest expense Earnings before tax Tax Net income Current assets Net fixed assets Total assets Current liabilities Long-term debt Owner's equity Total liabilities & equity Actual 2021 $ 6,900 5,400 Net fixed assets in 2022 Owner's equity in 2022 External funding required for 2022 700 250 90 460 161 $ 299 Universal Products Company Financial Statements, 2021 and Pro Forma 2022 ($) thousands) BALANCE SHEET Actual 2021 $3,600 3,000 $6,600 $ 1,130 Forecast 2022 700 4,770 $ 6,600 $ 7,300 5,500 700 260 80 760 266 $ 494 Forecast 2022 $ 3,850 $ 1,250 500 a. Assume that Universal plans to purchase $600,000 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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