David wants to invest in $50,000 worth of new equipment for the camps in 2021 He believes it would be possible to improve the average collection period to 30 days. Based on the 2021 projected financial statements, would there be enough cash to internally finance the purchase of this new equipment?

Make sure to show calculations that were used to reach the decision.

A B D 1 2 3 Field of Dreams Statement of Income For the Period ending Dcember 31,2020 &2021 20201 2021 5 Revenue 100,000 122.000 4 6 7 Cost of Sales 8 COGS 9 Total Cost of Sales 0 0 0 0 10 100,000 122,000 12 11 Gross Profit 13 Expenses 14 Salaries expense 15 Field rental expense 16 Administrative expense 17 Insurance Expense 18 Advertising Expense 19 Interst Expense 20 Depreciation/amortization 21 Other charges 22 Total expenses 20,000 14,000 7,000 6,000 800 0 47,8001 23,000 15,8201 7,350 0 3,000 7201 2,700 0 52,5901 23 52,200 69,4101 24 Profit before taxes 25 26 Income tax expenses 10,4401 13,882 27 28 Profit for the year 41,760 55,528 . B D 30 31 32 33 Field of Dreams Statement of Changes in Equity For the Period ending Dcember 31, 2020 &2021 2020 2021 34 Common shares 35 Balance at the Beginning of year 0 5,000 36 Common shres Issued 5,000 37 Other Changes 0 0 38 Balance at the end of Year 5,000 5,000 39 40 Retained Earnings 41 Balance at the Beginning of year 0 6,760 42 Profit applicable to common shareholders 41.760 55.528 43 Sub-total 41,760 62,288 44 Dividends paid to shareholders 35,000 36,750 45 Balance at the end of Year 6,760 25,538 46 47 Total shareholders Equity 11,760 30,538 48 49 A B C D 50 51 52 53 2021 Field of Dreams Statement of Financial Position For the Period ending Dcember 31,2020 &2021 2020 54 Assets 55 Non Current Assets 56 Bus 12,000 57 Equipment 1,500 58 Sub-total 13,500 59 Accumulated Depreciation amortization 60 61 Total non current assets 13,5001 62 Current Assets 63 Cash 9,5001 64 Trade Receivables 10,000 65 Total current asstes 19,500 66 67 Total assets 33,000 12,000 1,500 13,500 2,700 10,800 25.840 18,300 44,140 54,940 68 A B 69 Equity and Liabilities 70 share capital 71 Retained Earnings 5,000 6,760 5.000 25,538 72 73 Total shareholders Equity 11,7601 30,538 74 75 Non Current liabilities 76 Bank Loan(10 year term loan) 10,000 9,000 77 10,000 9,000 78 Total Non current Liabilities 79 80 Current liabilities 81 Interest payable 82 Income Tax Payable 83 Other accounts Payable 800 10,4401 0 1520 13,882 0 84 85 Total Current Liabilities 11240 15402 86 21.240 24,402 87 Total Liabilities 88 89 Total equity and Liabilities 33,000 54.940 90 A B D 1 2 3 Field of Dreams Statement of Income For the Period ending Dcember 31,2020 &2021 20201 2021 5 Revenue 100,000 122.000 4 6 7 Cost of Sales 8 COGS 9 Total Cost of Sales 0 0 0 0 10 100,000 122,000 12 11 Gross Profit 13 Expenses 14 Salaries expense 15 Field rental expense 16 Administrative expense 17 Insurance Expense 18 Advertising Expense 19 Interst Expense 20 Depreciation/amortization 21 Other charges 22 Total expenses 20,000 14,000 7,000 6,000 800 0 47,8001 23,000 15,8201 7,350 0 3,000 7201 2,700 0 52,5901 23 52,200 69,4101 24 Profit before taxes 25 26 Income tax expenses 10,4401 13,882 27 28 Profit for the year 41,760 55,528 . B D 30 31 32 33 Field of Dreams Statement of Changes in Equity For the Period ending Dcember 31, 2020 &2021 2020 2021 34 Common shares 35 Balance at the Beginning of year 0 5,000 36 Common shres Issued 5,000 37 Other Changes 0 0 38 Balance at the end of Year 5,000 5,000 39 40 Retained Earnings 41 Balance at the Beginning of year 0 6,760 42 Profit applicable to common shareholders 41.760 55.528 43 Sub-total 41,760 62,288 44 Dividends paid to shareholders 35,000 36,750 45 Balance at the end of Year 6,760 25,538 46 47 Total shareholders Equity 11,760 30,538 48 49 A B C D 50 51 52 53 2021 Field of Dreams Statement of Financial Position For the Period ending Dcember 31,2020 &2021 2020 54 Assets 55 Non Current Assets 56 Bus 12,000 57 Equipment 1,500 58 Sub-total 13,500 59 Accumulated Depreciation amortization 60 61 Total non current assets 13,5001 62 Current Assets 63 Cash 9,5001 64 Trade Receivables 10,000 65 Total current asstes 19,500 66 67 Total assets 33,000 12,000 1,500 13,500 2,700 10,800 25.840 18,300 44,140 54,940 68 A B 69 Equity and Liabilities 70 share capital 71 Retained Earnings 5,000 6,760 5.000 25,538 72 73 Total shareholders Equity 11,7601 30,538 74 75 Non Current liabilities 76 Bank Loan(10 year term loan) 10,000 9,000 77 10,000 9,000 78 Total Non current Liabilities 79 80 Current liabilities 81 Interest payable 82 Income Tax Payable 83 Other accounts Payable 800 10,4401 0 1520 13,882 0 84 85 Total Current Liabilities 11240 15402 86 21.240 24,402 87 Total Liabilities 88 89 Total equity and Liabilities 33,000 54.940 90