24 Jul WHAT IS THE RESULTING TOTAL FORECASTED AMOUNT OF THE LINE OF CREDIT?
Balance Sheet as of Show more Financing Deficit Stevens Textiles 2013 financial statements are shown below: Balance Sheet as of December 31 2013 (Thousands of Dollars) Cash $ 1080 Accounts payable $ 4320 Receivables 6480 Accruals 2880 Inventories 9000 Line of credit 0 Total current assets $16560 Notes payable 2100 Net fixed assets 12600 Total current liabilities $ 9300 Mortgage bonds 3500 Common stock 3500 Retained earnings 12860 Total assets $29160 Total liabilities and equity $29160 Income Statement for December 31 2013 (Thousands of Dollars) Sales $36000 Operating costs 32440 Earnings before interest and taxes $ 3560 Interest 460 Pre-tax earnings $ 3100 Taxes (40%) 1240 Net income $ 1860 Dividends (45%) $ 837 Addition to retained earnings $ 1023 Suppose 2014 sales are projected to increase by 20% over 2013 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31 2014. The interest rate on all debt is 9% and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2013 that it cannot sell off any of its fixed assets and that any required financing will be borrowed as notes payable. Also assume that assets spontaneous liabilities and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Round your answers to the nearest dollar. Do not round intermediate calculations. Total assets $ AFN $ What is the resulting total forecasted amount of the line of credit? Round your answer to the nearest dollar. Do not round intermediate calculations. Notes payable $ Show less
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