1. Long-Term Financial Planning: Prepare updated financial statements for Felicia & Fred based on the following assumptions:
2. The company?s sales are projected to grow by 10% next year. Calculate the effects and present the forecasted income statement and balance sheet for the company. Also consider that this sales increase will not require any new capital investments needed in lands and buildings and that mortgages will remain the same. Depreciation will remain constant and will accrue year over year in the balance sheet.
3. Indicate the amount of external financing required by the company for next year.

Felicia & Fred Balance Sheets Current and Prior Years Felicia & Fred Statement of Cash Flows For the Current Period Ended 000s 000s Assets Cash Accounts Receivable Inventory Total Current Assets Land Building & Equipment Less: Accumulated Depreciation - Building & Equipment Total Long Term Assets Total Assets 000s current prior 12,000 11,400 4,700 4,600 24,200 13,000 40,900 29,000 50,000 40,000 600,000 600,000 (375,700) (320,000) 274,300 320,000 315,200 349,000 Liabilities and Stockholders' Equity Accounts Payable Salaries Payable Interest Payable Short Term Notes Payable Taxes Payable Total Current Liabilities 9,200 0 3,000 24,000 0 36,200 7,000 4,200 0 0 11,200 22,400 Bonds Payable Total Long Term Liabilities 109,900 109,900 200,000 200,000 Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 120,000 49,100 169,100 315,200 120,000 6,600 126,600 349,000 Felicia & Fred Income Statements For the Current and Prior Periods Ended Revenue: Less: Cost of Goods Sold Less: Depreciation Expense Gross Margin Selling, General & Administrative Expenses Income Before Interest & Taxes Interest Expense Income Before Taxes Income Taxes Net Income 000s 000s current prior 975,000 950,000 (723,600) (749,000) (55,700) (52,000) 195,700 149,000 (58,200) (64,000) 137,500 85,000 (15,000) (12,000) 122,500 73,000 (70,000) (60,000) 52,500 13,000 Ratios Cash Flows from Operating Activities: Net Income 52,500 Adjustments to reconcile net income to net cash provided by operating activities Depreciation Expense 55,700 Increase in accounts receivable (100) Increase in inventory (11,200) Decrease in salaries payable (4,200) Increase in interest payable 3,000 Decrease in taxes payable (11,200) Increase in Short Term notes Payable 24,000 Increase in accounts payable 2,200 Net Cash Flow from Operating Activities 110,700 Cash Flows from Investing Activities: Cash paid to purchase land Net Cash Flow from Investing Activities (10,000) (10,000) Cash Flows From Financing Activities: Cash paid for Bonds Cash paid for dividends Net Cash Flow from Financing Activities Net Increase in Cash Plus: Cash Balance Prior Year Cash Balance Current Year (90,100) (10,000) (100,100) 600 11,400 12,000 Felicia & Fred Balance Sheets Current and Prior Years Felicia & Fred Statement of Cash Flows For the Current Period Ended 000s 000s Assets next Cash Accounts Receivable Inventory Total Current Assets Land Building & Equipment Less: Accumulated Depreciation - Building & Equipment Total Long Term Assets Total Assets 000s 000s current prior 12,000 11,400 4,700 4,600 24,200 13,000 40,900 29,000 50,000 40,000 600,000 600,000 (375,700) (320,000) 274,300 320,000 315,200 349,000 Liabilities and Stockholders' Equity Accounts Payable Salaries Payable Interest Payable Short Term Notes Payable Taxes Payable Total Current Liabilities 9,200 0 3,000 24,000 0 36,200 7,000 4,200 0 0 11,200 22,400 Bonds Payable Total Long Term Liabilities 109,900 109,900 200,000 200,000 Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 120,000 49,100 169,100 315,200 120,000 6,600 126,600 349,000 Felicia & Fred Income Statements For the Current and Prior Periods Ended 000s next Revenue: Less: Cost of Goods Sold Less: Depreciation Expense Gross Margin Selling, General & Administrative Expenses Income Before Interest & Taxes Interest Expense Income Before Taxes Income Taxes Net Income 000s 000s current prior 975,000 950,000 (723,600) (749,000) (55,700) (52,000) 195,700 149,000 (58,200) (64,000) 137,500 85,000 (15,000) (12,000) 122,500 73,000 (70,000) (60,000) 52,500 13,000 Cash Flows from Operating Activities: Net Income 52,500 Adjustments to reconcile net income to net cash provided by operating activities Depreciation Expense 55,700 Increase in accounts receivable (100) Increase in inventory (11,200) Decrease in salaries payable (4,200) Increase in interest payable 3,000 Decrease in taxes payable (11,200) Increase in Short Term notes Payable 24,000 Increase in accounts payable 2,200 Net Cash Flow from Operating Activities 110,700 Cash Flows from Investing Activities: Cash paid to purchase land Net Cash Flow from Investing Activities (10,000) (10,000) Cash Flows From Financing Activities: Cash paid for Bonds Cash paid for dividends Net Cash Flow from Financing Activities Net Increase in Cash Plus: Cash Balance Prior Year Cash Balance Current Year (90,100) (10,000) (100,100) 600 11,400 12,000