80.2K

Verified Solution

Link Copied!

Global Corp. expects sales to grow by 8% next year. Using the percent of sales method and the data provided in the given tables forecast:

a. Costs except depreciation b. Depreciation c. Net income d. Cash

e. Accounts receivable f. Inventory g. Property, plant, and equipment h. Accounts payable

(Note:

Interest expense will not change with a change in sales. Tax rate is

2626%.)

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capitalexpenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.

Click on the icons located on the top-right corners of the data tables below to copy its contents into a spreadsheet.

Income Statement ($ million)			Balance Sheet ($ million)
Net Sales	186.7		Assets
Costs Except Depreciation	175.1		Cash	23.2
EBITDA	11.6		Accounts Receivable	18.5
Depreciation and Amortization	1.2		Inventories	15.3
EBIT	10.4		Total Current Assets	57.0
Interest Income (expense)	7.7		Net Property, Plant, and Equipment	113.1
Pre-tax Income	2.7		Total Assets	170.1
Taxes (2626%)	0.7
Net Income	2.0		Liabilities and Equity
			Accounts Payable	34.7
			Long-Term Debt	113.2
			Total Liabilities	147.9
			Total Stockholders' Equity	22.2

Answer & Explanation Solved by verified expert

See Answer