(percent of sales forecasting) last year, sales for sports enterprise corporation (sec) were 12,000,000. Several balance sheet items vary directly with sales increases, as follows:

Cash Accounts receivable Inventory Net Fixed assets Accounts payable Other Accruals

3% 20% 15% 25% 10% 5%

The net profile margin for is 6%, and the firm pays out an annual dividend equal to 25% of net income. The latest balance sheet is

Assets Liabilities and owners equity

Cash 360,000 Accounts payable 1,200,000

Accounts receivable 2,400,000 Accruals 600,000

Inventory 1,800,000 Short term loan 800,000

Total current assets 4,560,000 Total current liabilities 2,600,000

Net fixed assets 3,000,000 Long term debt 1,000,000

Total assets 7,560,000 Stockholders equity 3,960,000

Total liabilities and equity 7,560,000

A) If sales increase by 25% to 15,000,000 next year, what additional financing is needed?

B) Assume that the additional financing needed is acquired by increasing the short term loan. Create a projected balance sheet for next year for SEC.