1. The forecasted Cost of Goods Sold for 2020 is *

a. $3,178,752

b. $3,200,000

c. 3,000,000.

d. None of the above.

e. $3,000,000

2. The forecasted Net Income for 2020 before elimination of DFN is *

a. Same as 2019

b. $30,961

c. $72,960

d. None of the above.

e. $0

3. The Depreciation expenses for the year 2020 is *

a. $145,000

b. $130,000

c. $10,000

d. $15,000

e. None of the above

4. The Discretionary Financing Needed (DFN) before elimination was *

a. $134,037

b. 0

c. $124,387

d. $1,346,081

e. None of the above

5. The long term debt for the year 2020 after the elimination of the DFN is *

a. $487,800

b. $621,837

c. $308,950

d. $0

e. None of the above

6. After the elimination of DFN, the Total Liabilities and Owner's Equity is *

$1,346,081

$1,277,800

$1,221,694

None of the above

$0

They want us to forecast a balance sheet and income statement

Refer to the income statement and the balance sheet of FDC Company. Assuming that for 2020 we have: Net addition to plant and equipment: $50,000. Life of new equipment: 10 years Salvage value: 0 Interest rate = 12% The company uses the straight line method for depreciation. Note: * Sales for the year 2020 is forecasted to be $3,450,000. *Cost of Goods Sold, Selling and G&A Expenses, Accounts receivable, inventory, accounts payables and other current liabilities are expected to change using the percent of sales method. *Cash, long term investment, short-term note payables, LT debt, common stock, and additional paid in capital are expected to remain the same as 2019. * Each item that changes with sales will be the four-year average percentage of sales. * Dividends are expected to be $67,600 the same as 2019. By using the percent of sales method, forecast the income statement and the Balance Sheet accounts for the year 2020. Calculate the DEN needed in 2020 and eliminate it by the Long Term Debt to answer the following questions. Refer to the income statement and the balance sheet of FDC Company. Assuming that for 2020 we have: Net addition to plant and equipment: $50,000. Life of new equipment: 10 years Salvage value: 0 Interest rate = 12% The company uses the straight line method for depreciation. Note: * Sales for the year 2020 is forecasted to be $3,450,000. *Cost of Goods Sold, Selling and G&A Expenses, Accounts receivable, inventory, accounts payables and other current liabilities are expected to change using the percent of sales method. *Cash, long term investment, short-term note payables, LT debt, common stock, and additional paid in capital are expected to remain the same as 2019. * Each item that changes with sales will be the four-year average percentage of sales. * Dividends are expected to be $67,600 the same as 2019. By using the percent of sales method, forecast the income statement and the Balance Sheet accounts for the year 2020. Calculate the DEN needed in 2020 and eliminate it by the Long Term Debt to answer the following questions