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At year-end 2020, RWD Inc.s total assets were $1.2 million and its accounts payable were $375,000. Sales, which in 2020 were $2.5 million, are expected
At year-end 2020, RWD Inc.s total assets were $1.2 million and its accounts payable were $375,000. Sales, which in 2020 were $2.5 million, are expected to increase by 25% in 2021. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. RWD typically uses no current liabilities other than accounts payable. Its profit margin on sales is 6%, and 40% of earnings will be paid out as dividends. Determine the amount of AFN for year 2021.
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