The Starlight, Inc., financial statements for the fiscal year ended June 30, 2011, are presented below. The firm’s sales are projected to grow at a rate of 20 percent next year, and all financial statement accounts will vary directly with sales. Based on that projection, develop a pro forma balance

Question

The Starlight, Inc., financial statements for the fiscal year ended June 30, 2011, are presented below. The firm’s sales are projected to grow at a rate of 20 percent next year, and all financial statement accounts will vary directly with sales. Based on that projection, develop a pro forma balance sheet and income statement for the fiscal year ending June 30, 2012.

Starlight, Inc. Balance Sheet as of June 30, 2011

[latex]\bold{Assets:}[/latex]	[latex]\bold{Liabilities and Stockholders' Equity:}[/latex]
[latex]\begin{matrix} ext{Cash} && \$25,135 \ ext{Accounts receivables} && 43,758 \ ext{Inventories} && \underline{167,112} \ ext{Total current assets} && \$236,005\ ext{Net fixed assets} && 325,422 \ ext{Other assets} && 13,125 \ ext{Total assets} && \$ 574,552 \end{matrix}[/latex]	[latex]\begin{matrix} ext{Account payables} && \$67,855 \ ext{Notes payables} && \underline{36,454} \ \ ext{Total current liabilities} && \$104,309 \ ext{Long-term debt} && 223,125 \ ext{Common stock} && 150,000 \ ext{Retained earnings} && \underline{97,118} \ \quad \quad \quad \quad \quad ext{Total liabilities and equity} && \$574,552 \end{matrix}[/latex]

Starlight, Inc. Income Statement for the Fiscal Year Ended June 30, 2011

[latex]\begin{matrix} ext{Net sales}&& \$1,450,000 \ ext{Costs} && \underline{812,500} \ EBITDA && \$637,500 \ ext{Depreciation} && \underline{175,000} \ EBIT && \$462,500 \ ext{Interest} && \underline{89,575} \ EBT &&\$372,925 \ Taxes (35\%) && \underline{130,524} \ ext{Net income} && \$242,401 \end{matrix}[/latex]

Accepted Answer

Starlight, Inc. Balance Sheet as of June 30, 2012

[latex]\bold{Assets:}[/latex]	[latex]\bold{Liabilities and Stockholders' Equity:}[/latex]
[latex]\begin{matrix} ext{Cash} && \$30,162 \ ext{Accounts receivables} && 52,510 \ ext{Inventories} && \underline{200,534} \ ext{Total current assets} && \$283,206\ ext{Net fixed assets} && 390,506 \ ext{Other assets} && \underline{15,750} \ \ ext{Total assets} && \$ 689,462 \end{matrix}[/latex]	[latex]\begin{matrix} ext{Account payables} && \$81,426 \ ext{Notes payables} && \underline{43,745} \ \ ext{Total current liabilities} && \$125,171 \ ext{Long-term debt} && 267,750 \ ext{Common stock} && 180,000 \ ext{Retained earnings} && \underline{116,542} \ \quad \quad \quad \quad \quad ext{Total liabilities and equity} && \$689,462 \end{matrix}[/latex]

Starlight, Inc. Income Statement for the Fiscal Year Ended June 30, 2012

[latex]\begin{matrix} Net \ sales && \$1,740,000 \ ext{Costs} && \underline{975,000} \ EBITDA && \$765,000 \ ext{Depreciation} && \underline{210,000} \ EBIT && \$555,000 \ ext{Interest} && \underline{107,490} \ EBT &&\$447,510 \ Taxes (35\%) && \underline{156,629} \ ext{Net income} && \$290,882 \end{matrix}[/latex]

$\bold{Assets:}$	$\bold{Liabilities and Stockholders' Equity:}$
$\begin{matrix} \text{Cash} && \$25,135 \\ \text{Accounts receivables} && 43,758 \\ \text{Inventories} && \underline{167,112} \\ \text{Total current assets} && \$236,005\\ \text{Net fixed assets} && 325,422 \\ \text{Other assets} && 13,125 \\ \text{Total assets} && \$ 574,552 \end{matrix}$	$\begin{matrix} \text{Account payables} && \$67,855 \\ \text{Notes payables} && \underline{36,454} \\ \\ \text{Total current liabilities} && \$104,309 \\ \text{Long-term debt} && 223,125 \\ \text{Common stock} && 150,000 \\ \text{Retained earnings} && \underline{97,118} \\ \quad \quad \quad \quad \quad \text{Total liabilities and equity} && \$574,552 \end{matrix}$

$\bold{Assets:}$	$\bold{Liabilities and Stockholders' Equity:}$
$\begin{matrix} \text{Cash} && \$30,162 \\ \text{Accounts receivables} && 52,510 \\ \text{Inventories} && \underline{200,534} \\ \text{Total current assets} && \$283,206\\ \text{Net fixed assets} && 390,506 \\ \text{Other assets} && \underline{15,750} \\ \\ \text{Total assets} && \$ 689,462 \end{matrix}$	$\begin{matrix} \text{Account payables} && \$81,426 \\ \text{Notes payables} && \underline{43,745} \\ \\ \text{Total current liabilities} && \$125,171 \\ \text{Long-term debt} && 267,750 \\ \text{Common stock} && 180,000 \\ \text{Retained earnings} && \underline{116,542} \\ \quad \quad \quad \quad \quad \text{Total liabilities and equity} && \$689,462 \end{matrix}$

Question 19.ss.1: The Starlight, Inc., financial statements for the fiscal yea...

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