It is now January 2018. The year 2017 finished well. The finalized year-end financial statements for 2017 are provided i

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It is now January 2018. The year 2017 finished well. The
finalized year-end financial statements for 2017 are provided in
the excel file associated with this assignment.
Randolf and Tenisa at Comfy Home would like the accountant to
prepare pro-forma financial statements for 2018 based on an
optimistic sales forecast. Tenisa has won the business of a large
corporate client and the couple believe that Comfy Home revenues
will increase by 30% in 2018 as compared with the year 2017.
Using the actual financial statements for 2017 (in the excel
file with this assignment), please prepare a pro-forma balance
sheet and income statement for 2018 using the percent of sales
method. For any financial statement line items where no additional
information is provided to indicate otherwise, assume the line item
changes proportionally to sales. Note: Please use excel formulas
for all calculations and do not round any intermediate steps. If
you round during intermediate steps, you may get rounding errors
resulting in incorrect answers.
Randolf and Tenisa provide the following additional information
to the accountant to prepare the pro-forma statements:
-No new investments in furniture and fixtures or buildings and
property are expected for 2018.
-Of the $540,000 in building and properties at year-end 2017,
$365,000 represents buildings and $175,000 represents property
(land). The buildings are being depreciated straight-line over 10
years with no salvage value.
-The furniture and fixtures are being depreciated straight-line
over 15 years with no salvage value.
-The $45,000 current portion of the bank loan will be paid on
December 31, 2018. Of the $255,000 in long term debt, another
$45,000 comes due on December 31, 2019. -Comfy Home does not plan
to obtain any additional loans in 2018.
-The interest rate for Comfy Home’s borrowing has declined
recently to 6%. It is expected to be the average rate of interest
for Comfy Home short and long-term borrowings in 2018. Use total
beginning borrowings to estimate the interest expense for 2018.
-Comfy Home's expected tax rate is 25%. Comfy Home has no
outstanding deferred tax assets or deferred tax liabilities.
-Comfy Home is planning a $50,000 cash disbursement to its
owners on 12/31/2018. No contributions to owners’ equity are
foreseen.
-Comfy Home’s insurance premium covers its buildings and
property as well as liability and is not expected to increase in
2018.
-Use Cash as the plug in the pro-forma financial statements.
Question 1: What is the
forecasted contributed capital on Comfy
Home’s 2018 pro-forma financial statements?
Question 2: What is the forecasted accounts
receivable on Comfy Home’s 2018 pro-forma financial
statements?
Question 3: What is the forecasted deferred
revenue on Comfy Home’s 2018 pro-forma financial
statements?

It Is Now January 2018 The Year 2017 Finished Well The Finalized Year End Financial Statements For 2017 Are Provided I 1 (336.37 KiB) Viewed 20 times

COMFY HOME COMPANY Balance Sheet As of December 31, 2016 Current Assets: Cash Accounts receivable Inventories Prepaid expenses Total Current Assets $ $ S $ $ 110,000 140,000 310,000 25.000 585,000 Current Liabilities: Accounts Payable Salaries and wages payable Current portion of bank loan Deferred revenue Total Current Liabilities $ $ $ $ $ 90,000 20,000 45,000 15,000 170.000 120,000 Non-Current Assets: Furniture and fixtures Buildings and property (Accumulated Depreciation) Total Non-Current Assets Non-Current Liabilities: Bank Loan Total Non-Current Liabilities $ s 300,000 300,000 $ $ 450,000 $ (154,000) S 416,000 Owners' Equity: Contributed Capital Retained earnings Total Equity $ $ $ 250,000 281,000 531,000 Total Assets $ 1.001.000 Total Liabilities and Owners' Equity $1,001,000 COMFY HOME COMPANY Balance Sheet As of December 31, 2017 COMFY HOME COMPANY Income Statement For the year ending December 31, 2017 Current Assets: Cash Accounts receivable Inventories Prepaid expenses Total Current Assets $ $ $ $ $ 143,000 178,000 358,000 33,000 712,000 Current Liabilities: Accounts Payable Salaries and wages payable Current portion of bank loan Deferred revenue Total Current Liabilities $ $ S $ $ $ 196,000 30,000 45,000 18,000 289,000 Total Revenue Cost of Goods Sold Gross Profit Salaries and wages Marketing expenses Selling, General, and Administrative To Insurance expense Depreciation expense Operating Profit Interest expense Taxes Net Income $ 1,602,000 $ 985.000 $ 617,000 S 199,000 $ 46,000 $ 98,000 S 48,000 $ 44,000 $ 182,000 S 30,000 $ 33,000 $ 119,000 Non-Current Assets: Furniture and fixtures Buildings and property (Accumulated Depreciation) Total Non-Current Assets Non-Current Liabilities: Bank Loan Total Non-Current Liabilities $ $ $ 255,000 255,000 $ 150,000 $ 540,000 $ (198,000) $ 492,000 Owners' Equity: Contributed Capital Retained earnings Total Equity S $ $ 260,000 400,000 660,000 Total Assets $ 1.204,000 Total Liabilities and Owners' Equity $ 1,204,000