The Cambridge Cartage Company has partially completed its forecast of next year’s financial statements as follows.
Cambridge Cartage Company Financial Plan ($000)
Income Statement Balance Sheet
Next Year Next Year
Revenue $17,220 Beginning Ending
Cost/expenses 14,120 ASSETS
EBIT $3,100 Total assets $12,540 $18,330
Interest ? LIABILITIES & EQUITY
EBT ? Current liabilities $410 $680
Tax ? Debt 5,630 ?
EAT ? Equity 6,500 ?
Total L&E $12,540 $18,330
The firm pays interest at 10% on all borrowings and pays a combined state and federal tax rate of 40%. Complete the forecast income statement and balance sheet. Begin by guessing at interest expense as 10% of beginning debt.
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