Financing Deficit Stevens Textile Corporation's 2018 financial statements are shown below: Balance Sheet as of December 31, 2018 (Thousands of Dollars) Cash Receivables Inventories Total current assets Net fixed assets Total assets $ 1,080 Accounts payable 6,480 Accruals 9,000 Line of credit $16,560 Notes payable 12,600 $ 4,320 2,880 0 2,100 Total current liabilities $ 9,300 3,500 Common stock Retained earnings $29,160 Total liabilities and equity 3,500 12,860 $29,160 Mortgage bonds Income Statement for January 1 - December 31, 2018 (Thousands of Dollars) Sales $36,000 Operating costs 32,440 Earnings before interest and taxes $ 3,560 Interest Pre-tax earnings 460 Taxes (40%) Net income Dividends (45%) Addition to retained earnings $3,100 1,240 $ 1,860 $ 837 $1,023 a. Suppose 2019 sales are projected to increase by 10% over 2018 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2019. The interest rate on all debt is 10%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2018, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Do not round intermediate calculations. Round your answers to the nearest dollar. Total assets: $ AFN: $ b. What is the resulting total forecasted amount of the line of credit? Do not round intermediate calculations. Round your answer to the nearest dollar. $ c. In your answers to Parts a and b, you should not have charged any interest on the additional debt added during 2019 because it was assumed that the new debt was added at the end of the year. But now suppose that the new debt is added throughout the year. Don't do any calculations, but how would this change the answers to parts a and b? If debt is added throughout the year rather than only at the end of the year, interest expense will be -Select- than in the projections of part a. This would cause net income to be -Select- , the addition to retained earnings to be | -Select-, and the AFN to be -Select- . Thus, you would have to -Select- new debt.