Answer:
<u>a.- </u>
<u>Current Balance Sheet</u>
Current Assets: 80 Liabilities 40
Fixed 280 Long Term Debt 125
Common Stock 53
RE: 142 (A)
Total Assets 360 Total liab + Equity 360
<u>c-1</u>
Projected Balance sheet
Current Assets: 96 Liabilties 48
Fixed assets: 336 Long term debt 174.6 (B)
Common Stock 53
RE 156.4
Total Assets 432 Total Liab+ SE 432
b) external funds nedeed addiontal external fund 57.6 Millions
c-2 the total liab will be 222.6
Explanation:
sales increase 20% to 480 so previously it had: 480/(1+20%) = 400
profit margin 15%
net income: 480 x 15% = 72
Dividends: 72 x 20% = 14.4
RE Increase: 14.4
<u>(A) RE </u>is solve by diffrence using the accounting equation
assets = liab + equity
360 = 40 + 125 + 53 + RE
RE = 360 - 40 - 125 - 53 = 142
<u>(B) Long term debt </u>is solve by diffrence using the accounting equation
assets = liab + equity
360 = 40 + LT debt + 53 + 156.4
LT debt= 360 - 40 - 53 -156.4= 174.6
Current liabilities:
40 + 125 = 165
Proejcted liab:
48 + 174.6 = 222.6
found needed: 222.6 - 165 = 57.6
