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CH 4 Quiz 0 Saved Help Save& Exit Submit w The Longbranch Western Wear Company has the follawing nancial statements. which are representative of the company's historical average. Income statement Sales $200,000 Expenses 154,500 Earnings before interest and taxes 5 45,500 Interest 3,500 Earnings before taxes $ 42,000 Taxes 12,000 Earnings after taxes 5 30,000 Dividends 5 15,000 i Balance sheet Assets Liabilities and Shamholders' Equity Cash $9,000 Accounts payable 515,500 Accuunts receivable 25,000 Accrued wages 2,700 Inventory 30,000 Accrued taxes 13,800 Current assets $64,000 Current liabilities $32,000 Capital assets 85,000 Notes payable 3,500 Lonqrterm debt 22,500 Common 51:05): 35,000 Retained earnings 51,000 Total assets $149,000 Total liabilities and equity $149,000 Longbranch is expecting a 20 percent increase in sales next year. and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of capital assets; instead. it will be done through more efficient asset utilization in the existing stores. Of liabilities, only current liabilities vary directly with sales. ( Prev 2 0f 2 Next Connect X M MHE Reader X A 2% https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252 ... V ED G E Getting Started WP WileyPLUS a Connect - To Do Assig... M Gender Discrimination... @ Login Flashcards - Managem... @ Chapter 1 - Multiple C... From Google Chrome CH 4 Quiz i Saved Help Save & Exit Submit Check my work 2 a. Using a percent-of-sales method, determine whether Longbranch Western Wear has external financing needs. (Input the amount as a positive value.) The firm |needs ~ $ in external funds 01:59:42 b. Prepare a pro forma balance sheet with any financing adjustment made to notes payable and excess, if any, shall reduce long term debt. (Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity. Do not leave any empty spaces; input a 0 wherever it is required.) Balance Sheet Current assets Liabilities Cast S Accounts payable $ Accounts receivable Accrued wages Inventory Accrued taxes Current assets $ Current liabilities Capital Assets Notes payable Long-term debt Common stock Retained earnings Total assets Total liabilities and equity c. Calculate the current ratio and total debt to assets ratio for each year. (Round the final answers to 2 decimal places.) Year 1 Year 2 Current ratio X Total debt/ assets Mc Graw Hill Type here to search w ^ - " ( 1) ENG 12:15 AM 2020-10-04 EA