BIG Industries wishes to prepare a pro forma balance sheet for December 31, 2013. The firm expects 2013 sales to total US$3,000,000. The following information has been gathered.

1. A minimum cash balance of US$50,000 is desired.

2. Marketable securities are expected to remain unchanged.

3. Accounts receivable represent 10 percent of sales.

4. Inventories represent 12 percent of sales.

5. A new machine costing US$90,000 will be acquired during 2013. Total depreciation for the year will be US$32,000.

6. Accounts payable represent 14 percent of sales.

7. Accruals, other current liabilities, long-term debt, and common stock are expected to remain unchanged.

8. The firm's net profit margin is 4 percent, and it expects to pay out US$70,000 in cash dividends during 2013.

9. The December 31, 2012, balance sheet follows.

a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31, 2013, for BIG Industries.
b. How much, if any, additional financing will BIG Industries require in 2013? Discuss.
c. Could BIG Industries adjust its planned 2013 dividend to avoid the situation described in part b? Explain how.

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BIG Industries Balance Sheet December 31, 2012 Liabilities and Stockholders' Equity Accounts payable Other current liabilities Assets USS 45,000 Cash Marketable securities Accounts receivable Inventories USS 395,000 60,000 30,000 Total current liabilities USS 485,000 USS 350,000 USS 200,000 USS 220,000 15,000 Accruals 255,000 340,000 USS 655,000 000 Total current assets Long-term debt Common stock Net fixed assets USS 600, USS1255,000Retained earnings Total assets Total liabilities and stockholders' equity USS1,255,000