k t nces The Longbranch Western Wear Company has the following financial statements, which are representative of the company's historical average. Income Statement Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends $250,000 203,100 $ 46,900 3,400 $ 43,500 11,000 $ 32,500 $ 9,750 Balance Sheet Assets Liabilities and Shareholders' Equity Cash $7,000 Accounts payable $14,400 Accounts receivable 24,000 Accrued wages 2,600 Inventory Current assets Capital assets $60,000 84,000 Notes payable 29,000 Accrued taxes Current liabilities Long-term debt Common stock Retained earnings 13,000 $30,000 8,400 22,000 34,000 49,600 Total assets $144,000 Total liabilities and equity $144,000 Longbranch is expecting a 30 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. 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 surplus funds 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. 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 surplus funds 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.) Current assets Cash $ ces Accounts receivable Inventory Current assets Capital Assets Balance Sheet Accounts payable Accrued wages Liabilities Accrued taxes $ Current liabilities Notes payable Long-term debt $ Common stock V Total assets Retained earnings 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.) Current ratio Total debt/ assets Year 1 Year 2 X X % %