Eskimo Pie Case

Topics: Generally Accepted Accounting Principles, Balance sheet, Inventory, Revenue, Asset, Liability / Pages: 3 (632 words) / Published: May 7th, 2013
Mazen Saeed AlGhamdi 200736930
The company have also poorly forecasted sales from January to August ($11.9) with actual sales amounting to $8.7m. The company wants to borrow more money because it wants to buy new machinery at a cost of $350k and this is due to no machinery being replaced because of the economic downturn.
The company purchased $420k worth of raw materials, which it will use by the end of the year. There was a substantial backlog of orders amounting to $16.5m on 31st August. There was a missing piece of electronic equipment to finish some machines valued at $1,320,000, which was due to arrive and then the orders can be finished. The company needs to stay cash positive on a daily basis in order to finance its operations and business expansion. Based on the information in the case, prepare a projected cash budget for the four months September through December 1979, a projected income statement for the same period, and a pro forma balance sheet as of December 31, 1979.
See attached excel spreadsheet below.

| | | | | | | | | | | | Pro Forma Statements | | | | | | | | (thousands of dollars) | | | | | | | | | | | | Pro Forma | | June | July | Aug. | Sept. | Oct. | Nov. | Dec. | Net sales | $1,620 | $723 | $507 | $2,163 | $1,505 | $1,604 | $2,265 | Purchases | | | | $600 | $600 | $600 | $600 | WIP inventory reduction | | | | $1,320 | $0 | $0 | $0 | Raw materials reduction | | | | $105 | $105 | $105 | $105 | Cost of goods sold | | | | $2,025 | $705 | $705 | $705 | Depreciation | | | | $10 | $10 | $14 | $14 | Other expenses | | | | $400 | $400 | $400 | $400 | Cost of sales and other expenses | $1,327 | $597 | $342 | $2,435 | $1,115 | $1,119 | $1,119 | EBIT | $293 | $126 | $165 | -$272 | $390 | $486 | $1,147 | Interest expense | $15 | $15 | $15 | $15 | $15 | $20 | $20 | Net income before taxes | $278 | $111 | $150 | -$287 | $375 | $466 |

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