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Hello, kindly help me solve this problem about the Additional funds needed. (12-7) Garlington Technologies' financial statements for 2005 are attached here. Garlington Technologies Inc.:

Hello, kindly help me solve this problem about the Additional funds needed.

(12-7) Garlington Technologies' financial statements for 2005 are attached here.

Garlington Technologies Inc.: Balance Sheet as of December 31, 2005
Assets
Cash $ 180,000
Receivables $ 360,000
Inventory $ 720,000
Total current assets $ 1,260,000
Total Fixed assets $ 1,440,000
Total assets $ 2,700,000
Liabilities & Owners Equity
Accounts payable $ 360,000
Documents to pay $ 156,000
Accumulations $ 180,000
Total current liabilities $ 696,000
Common actions $ 1,800,000
Retained earnings $ 204,000
Total assets $ 2,700,000
Garlington Technologies Inc.: Profit and Loss as of December 31, 2005
Revenue $ 3,600,000
Operating cost $ 3,279,720
Income before interest and taxes $ 320,280
Interest $ 18,280
Income before taxes $ 302,000
Taxes (40%) $ 120,800
Net income $ 181,200
Dividends $ 108,000

Assume that 2006 sales increased 10% over 2005 and that dividends will reach $ 112,000. Prepare the proforma financial statements using the percentage of sales method. Assume that the company was operating at full capacity in 2005. Use an interest rate of 13% on the liability balance at the beginning of the year. Assume that the additional funds needed will be in the form of documents payable.

Reference book:

Corporate Finance: A Focused Approach by Ehrhardt and Brigham Second Edition

Thanks!

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