Baldwin Products Company anticipates reaching a sales level of $9 8 million in one year The company expects earnings after taxes during the next year to equal $430,000 During the past several years, the company has been paying $50,000 in dividends to its stockholders The company expects to continue this policy for at least the next year The actual balance sheet and income statement for Baldwin during Year 1 follow Baldwin Products Company Balance Sheet as of December 31, Year 1 Cash $ 220,000 Accounts payable $ 640,000 Accounts Receivable 350,000 Notes payable 580,000 Inventories 1,260,000 Long term Debt 200,000 Fixed assets, net 1,720,000 Stockholders' equity 2,130,000 Total assets $3,550,000 Total liabilities and equity $3,550,000 Income Statement for the Year Ending December 31, Year 1 Sales $4,900,000 Expenses, including interest and taxes 4,670,000 Earnings after taxes 230,000 Additional Financing Needed $ Pro Forma Balance Sheet as of Dec 31, Year 2 Assets Liabilities Cash $ Accounts Payable $ Accounts Receivable Notes Payable Inventories Long term Debt Fixed Assets, net Stockholders' equity Total Assets $ Total Liabilities and Stockholders' Equity $ Using the percentage of sales method, calculate the additional financing Baldwin Products will need over the next year at the $9 80 million sales level Show the pro forma balance sheet for the company as of December 31, Year 2, assuming that a sales level of $9 80 million is reached Assume that the additional financing needed is obtained in the form of additional notes payable Round your answers to the nearest dollar Suppose that the Baldwin Products management feels that the average collection period on its additional salesthat is, sales over $4 90 millionwill be 45 days, instead of the current level By what amount will this increase in the average collection period increase the financing needed by the company over the next year Round your answer to the nearest dollar $ If the Baldwin Products banker requires the company to maintain a current ratio equal to 1 5 or greater, what is the maximum amount of additional financing that can be in the form of bank borrowings (notes payable) Round your answer to the nearest dollar $

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Baldwin Products Company anticipates reaching a sales level of $9.8 million in one year. The company expects earnings after taxes during the next year to

Baldwin Products Company anticipates reaching a sales level of $9.8 million in one year. The company expects earnings after taxes during the next year to equal $430,000. During the past several years, the company has been paying $50,000 in dividends to its stockholders. The company expects to continue this policy for at least the next year. The actual balance sheet and income statement for Baldwin during Year 1 follow.

Baldwin Products Company Balance Sheet as of December 31, Year 1
Cash	$ 220,000	Accounts payable	$ 640,000
Accounts Receivable	350,000	Notes payable	580,000
Inventories	1,260,000	Long-term Debt	200,000
Fixed assets, net	1,720,000	Stockholders' equity	2,130,000
Total assets	$3,550,000	Total liabilities and equity	$3,550,000

Income Statement for the Year Ending December 31, Year 1
Sales	$4,900,000
Expenses, including interest and taxes	4,670,000
Earnings after taxes	230,000

Additional Financing Needed: $

*Pro Forma Balance Sheet as of Dec. 31, Year 2*
Assets		Liabilities
Cash	$ ____	Accounts Payable	$ ____
Accounts Receivable	_____	Notes Payable	____
Inventories	______	Long-term Debt	____
Fixed Assets, net	____	Stockholders' equity	_____
Total Assets	$ _____	Total Liabilities and	____
		Stockholders' Equity	$ _____

Using the percentage of sales method, calculate the additional financing Baldwin Products will need over the next year at the $9.80 million sales level. Show the pro forma balance sheet for the company as of December 31, Year 2, assuming that a sales level of $9.80 million is reached. Assume that the additional financing needed is obtained in the form of additional notes payable. Round your answers to the nearest dollar.
Suppose that the Baldwin Products management feels that the average collection period on its additional salesthat is, sales over $4.90 millionwill be 45 days, instead of the current level. By what amount will this increase in the average collection period increase the financing needed by the company over the next year? Round your answer to the nearest dollar.

$
If the Baldwin Products banker requires the company to maintain a current ratio equal to 1.5 or greater, what is the maximum amount of additional financing that can be in the form of bank borrowings (notes payable)? Round your answer to the nearest dollar.

$