ue Elk Manufacturing has the following end-of-year balance sheet: Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts payable Accrued liabilities Accounts receivable Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Assets $150,000 400,000 350,000 $900,000 $2,100,000 O $456,000 O $684,000 O $598,500 $3,000,000 Notes payable Total Current Liabilities Long-Term Bonds Total Debt Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 800,000 700,000 $1,500,000 $3,000,000 e firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, ue Elk Manufacturing generated $500,000 net income on sales of $14,000,000. The firm expects sales to increase by 19% this coming year and also pects to maintain its long-run dividend payout ratio of 40%. uppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets at is necessary to support Blue Elk Manufacturing's expected sales. (Note: Do not round intermediate calculations.)
ue Elk Manufacturing has the following end-of-year balance sheet: Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts payable Accrued liabilities Accounts receivable Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Assets $150,000 400,000 350,000 $900,000 $2,100,000 O $456,000 O $684,000 O $598,500 $3,000,000 Notes payable Total Current Liabilities Long-Term Bonds Total Debt Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 800,000 700,000 $1,500,000 $3,000,000 e firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, ue Elk Manufacturing generated $500,000 net income on sales of $14,000,000. The firm expects sales to increase by 19% this coming year and also pects to maintain its long-run dividend payout ratio of 40%. uppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets at is necessary to support Blue Elk Manufacturing's expected sales. (Note: Do not round intermediate calculations.)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter7: Fixed Assets, Natural Resources, And Intangible Assets
Section: Chapter Questions
Problem 7.3.3MBA
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Step 1: Formulas.
VIEWStep 2: Computation of Expected Sales of next year.
VIEWStep 3: Answer to part 1. Computation of Increase in total assets.
VIEWStep 4: Answer to part 2. Computation of Increase in Spontaneous liabilities
VIEWStep 5: Answer to part 3. Computation of Increase in Retained earnings.
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