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Louie is forecasting his financial statements for next year. He is finished with his income statement, but needs your help on his balance sheet. Based

Louie is forecasting his financial statements for next year. He is finished with his income statement, but needs your help on his balance sheet. Based on the following information, how much additional financing (borrowing) or excess financing should Louie plan on for his business in 2017? Louie does not anticipate selling any stock in 2017.

A. 2000 Excess

B. 2000 Borrowing Needed

C. 1000 Excess

D. 1000 Borrowing Needed

Income Statement Pro-Forma 2017 Balance Sheet 2016 Pro-Forma 2017
Sales 100,000 Current Assets 5,000 6,000
Less: COGS 80,000 Net Fixed Assets 6,000 5,500
Gross Profit 20,000 Total Assets 11,000 11,500
Less: Operating Expenses 5,000
EBT 15,000 Current Liab 8,000 7,500
Less: Taxes @40% 6,000 Owner's Eq 3,000
Net Profit After Tax: 9,000 Total Liab & Owner's Eq 11,000
Dividends Paid 6,000

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