Question

Based on the projections, Decker will have a. a financing deficit of $36 b. a financing surplus of $36 c. zero financing surplus or deficit d. a financing surplus of $255 e. a financing deficit of $255

Answer 1

Answer:

B, A financing surplus of $36

Explanation:

As the question is incomplete so firstly I am going to write the question for you first and its solution

Question: Decker Enterprises Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating liabilities. Income statement Current Projected Sales na 1,500 Costs na 1,080 Profit before tax na 420 Taxes (25%) na 105 Net income na 315 Dividends na 95 Balance sheets Current Projected Current Projected Current assets 100 115 Current liabilities 70 81 Net fixed assets 1,200 1,440 Long-term debt 300 360 Common stock 500 500 Retained earnings 430 650 Based on the projections, Decker will have

Solution :

We need to find total assets first

Current assets   = 115

Net fixed assets = 1440

Total assets = 115+1440= 1555

Secondly, we need to find sum of liabilities and stockholder equities to compare them with Total assets.

Liabilities = current liabilities + long term debt

Liabilities = 81 + 360 = 441

Equity = Common stock + retained earnings

Equity = 500 + 650 = 1150

Total equity + liabilities = 1591

Financial Deficit/Surplus = Total assets - Total  liabilities and stockholder equity

Financial Deficit/Surplus = 1555 - 1591

Financial Deficit/Surplus = -36 surplus