1. Part A: Show changes to the 2012 pro forma balance sheet assuming the company borrows the necessary funds for the capital improvements at an interest rate of 7 percent. Ignore depreciation on the new equipment. Enter your calculations in the table provided below.

Assets	Calculations	Liabilities and Owners Equity	Calculations
Cash and Marketable Securities		Notes payable
Accounts Receivable		Accounts payable
Inventory		Accrued expenses
Current Assets		Current liabilities
Gross Fixed Assets		Long-term debt
Accumulated Depreciation		Common Stock ($10 par)
Net fixed assets		Retained earnings
Total assets		Total liabilities and owners equity

Part B: Does this cause any significant change in the financials? Type your two- to three-sentence response below.

I am looking for help answering part 1. I don't know how to fill the the chart.

I am looking for help with part A. I don't know how to fill in the chart.

t are likely to increase sharply in the coming year. Currently near capacity, demand is expected to remain high, and new ent will be needed. In addition, some major improvements is operating plant and to existing facilities will have to be made in order for the company to remain tive. The planning for these changes has been occurring for some time. all of these changes do not have to be made in 2012, it is clear that without them. The total cost of these and though all ofthese the company cannot continue to grow capital improvements is S30 million. See Exhibits C5.1 and C5.2. EXHIBIT 5.1 Ratios for the Fancy Foods Industry Price-earnings ratio (times) Current ratio (times) Quick ratio (times) Total debt ratio(%) Total asset turnover ratio (times) Return on equity(%) Return on sales (%) Average collection period days) 16.0 1.8 0.6 53.0 1.5 8.0 2.5 27.0 EXHIBIT C5.2 Quacker Cracker Balance Sheet for 2012 (s000s) (prepared before any financing decisions have been made Assets Cash and Liabilities and Equity Notes payable $16,000 Accounts payable 19,500 23,000 55,000 Accrued expenses Current liabilities Long-term debt Current assets 25,500 40,000 29,500 $95,000 Gros fed assets12.000 -12.000 Common stock ($10 parl Net fixed assets Total assets 40,000 Retained earnings and equity Not publicly traded, the last private sale was at $50 a share. lood companies contain specialty food segments, including Ralcorp(s in salesi a suboidiary of ConAgra Fosls and Smucker's with sales of se hoon THE ATTITUDE TOWARD DEBT OCexpects strong growth this year (assume that it is now January 20 Dianne McCabe, the chieffinancial officer (CPOL hopes she can m borrowing to finance the company'sexpansion. She realizes, l is ikely to face stiff opposition from Quincy's family make a case for however, that she go into debt Ouincy detested borrowing money, and his motto was, "Never and hang onto cash as long as possible--because you never now his family and employees called him ch try Quincy. For the irst half of the company's existence, the Cynsky family owned all the company's stock. Due to the need to finance expanslon, shares have been sold during the last 30 years to individuals outside the family. By 2007, the Cymsky family's ownership share had declined to half of all shares, and although the family has not been active in running the firm in recent years, it does insist on keeping the family traditions avolding debt and koeping high cash balances To this day, OC has never owed anything beyond its accounts payable and yet accruals. (Accrued expenses are liabilities that have been incurred but not involced.) CFO McCabe belleves that the "no debt" and "high cash" policies have hurt the owners' profits. At each annual meeting, she has tried unsuc- cessflully to convince the Cynsky family to consider more aggressive financial management. She is becoming concerned that her objective financial advice is irritating the family FINANCIAL PLANNING McCabe decides to estimate the amount of funds OC will have to obtain in 2012 She knows that 2012 isexpected to be a big year for the company, particularly as the weak economy increases the sales offancy foods for entertaining at home. As a result, sales are predicted to increase by 25 percent, to $230 million. Due to the strong demand, the marketing vice president feels any cost increases can easily be passed on, and McCabe estimates that the cost ol goods sold imostly food ingredients) will be S180 million. include depreciation (estimated at $5 million), and administrative and selling expenses (S15 million). The corporate tax rate is 35 percent. Cost of goods sold does not