Using the 2010 financial statements for DRE Corporation and this additional information,prepare a pro forma income statement and balance sheet for the year 2011.Determine the discretionary financing needed (DFN)and assume that if the DFN is positive,the company will increase long-term debt,and if DFN is negative,the company will pay back some long-term debt.
Sales for next year (2011)are expected to increase by $300,000 to $1,800,000.The firm is running efficiently and at full capacity so that all assets and spontaneous liabilities are expected to increase proportionally with sales.The dividend payout ratio for 2011 will be 40%.
DRE Corporation
2010 Financial Statements
Correct Answer:
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