The 2008 income statement for Newman Foods is provided below: Sales are expected to increase by 15% in 2009. The firm will have to take on more debt
to support its growth, and the interest expense is expected to increase to $32,000. The
tax rate is expected to remain at a flat 15%. All other accounts will remain at their
historical relationship to sales. Develop a pro forma income statement for Newman
Foods for 2009.

Question

The 2008 income statement for Newman Foods is provided below:  Sales are expected to increase by 15% in 2009. The firm will have to take on more debt
to support its growth, and the interest expense is expected to increase to $32,000. The
tax rate is expected to remain at a flat 15%. All other accounts will remain at their
historical relationship to sales. Develop a pro forma income statement for Newman
Foods for 2009.

Quizplus · Accepted Answer

The Answer of The 2008 income statement for Newman Foods is provided below:  Sales are expected to increase by 15% in 2009. The firm will have to take on more debt
to support its growth, and the interest expense is expected to increase to $32,000. The
tax rate is expected to remain at a flat 15%. All other accounts will remain at their
historical relationship to sales. Develop a pro forma income statement for Newman
Foods for 2009.

The 2008 Income Statement for Newman Foods Is Provided Below