Financial forecasting)The balance sheet of the Thompson Trucking Company (TTC) follows: LOADING... . TTC had sales for the year ended 12/31/13 of $48.1548.15 million. The firm follows a policy of paying all net earnings out to its common stockholders in cash dividends. Thus, TTC generates no funds from its earnings that can be used to expand its operations. (Assume that depreciation expense is just equal to the cost of replacing worn-out assets.). Hint: Make sure to round all intermediate calculations to at least five decimal places.

a.If TTC anticipates sales of $79.49million during the coming year, develop a pro forma balance sheet for the firm for 12/31/14. Assume that current assets vary as a percent of sales, net fixed assets remain unchanged, and accounts payable vary as a percent of sales. Use notes payable as a balancing entry.

current assets _______

net fixed assets ____

total asssets _____

accounts payable ____

notes payable ____

bonds payable ____

common equity ____

total liability and common equity__

b.How much "new" financing will TTC need next year?

c.What limitation does the percent-of-sales forecast method suffer from? Discuss briefly.

Data

Current Assets 9.04 Accounts Payable 4.36

Net Fixed Asets 15.28 Notes Payable 0

Total 24.32 Bonds Payable 10.63

Common Equity 9.33

Total 24.32