55. Long-Term Financing Needed At year-end 2015, Wallace Landscaping's total assets were $2.17 million and its accounts payable were $560,000. Sales, which in 2015 were $3.5 million, are expected to increase by 35% in 2016. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current abilities other than accounts payable. Common stock amounted to $625,000 in 2015, and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new common stock in 2016 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long term debt at the end of 2016. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends y a. What were Wallace's total long term debt and total liabilities in 2015? Answer + b. How much new long-term debt financing will be needed in 2016? (Hint- AFN - New stock = New long-term debt.) Answe! 5-6. Additional Funds Needed The Booth Company's sales are forecast to increase from $1,000 in 2015 to $2,000 in 2016. Here is the December 31, 2015, balance sheet: Cash Accounts receivable Inventories Net fixed assets $ 100 200 200 Accounts payable Notes payable Accruals Long-term debt Common stock Retained earnings Total liabilities and equity $50 150 50 400 500 100 250 $1,000 Total assets 51,000 Booth's fixed assets were used to only 50% of capacity during 2015, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist. Booths after-tax profit margin is forecasted to be 5% and its payout ratio will be 60%. What is Booth's additional funds needed (AFN) for the coming year