Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales... Consider the following income statement for the Heir Jordan Corporation:
HEIR JORDAN CORPORATION
Income Statement
Sales $ 49,000
Cost 40,300
Taxable income $ 8,700
Taxes (22%) 1,914
Net income $ 6,786
Dividends $ 2,400
Addition to retained earnings 4,386
The balance sheet for the Heir Jordan Corporation follows.
HEIR JORDAN CORPORATION
Balance Sheet
Assets Liabilities and Owners’ Equity
Current assets Current liabilities
Cash $ 2,950 Accounts payable $ 2,400
Accounts receivable 4,100 Notes payable 5,400
Inventory 6,400 Total $ 7,800
Total $ 13,450 Long-term debt $ 28,000
Owners’ equity
Fixed assets Common stock and paid-in surplus $ 15,000
Net plant and equipment $ 41,300 Retained earnings 3,950
Total $ 18,950
Total assets $ 54,750 Total liabilities and owners’ equity $ 54,750
Prepare a pro forma balance sheet, assuming a sales increase of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)
Calculate the EFN. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)