Please see attached. I need answers for (A) and (B)

Financing Deficit

Stevens Textile Corporation's 2016 financial statements are shown below:

Balance Sheet as of December 31, 2016 (Thousands of Dollars)

Cash$1,080Accounts payable$4,320Receivables6,480Accruals2,880Inventories9,000Line of credit0Total current assets$16,560Notes payable2,100Net fixed assets12,600Total current liabilities$9,300Mortgage bonds3,500Common stock3,500Retained earnings12,860Total assets$29,160Total liabilities and equity$29,160Income Statement for January 1 - December 31, 2016 (Thousands of Dollars)

1. Sales$36,000Operating costs32,440Earnings before interest and taxes$3,560Interest460Pre-tax earnings$3,100Taxes (40%)1,240Net income$1,860Dividends (45%)$837Addition to retained earnings$1,023Suppose 2017 sales are projected to increase by 20% over 2016 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2017. The interest rate on all debt is 11%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2016, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as a line of credit. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Round your answers to the nearest dollar. Do not round intermediate calculations.
2. Total assets$AFN$
3. What is the resulting total forecasted amount of notes payable? Round your answer to the nearest dollar. Do not round intermediate calculations.
4. Notes payable$

12/10/2017 CengageNOW | Online teaching and learning resource from Cengage Learning Assignment Score: 62.50% Assignment: Week 10 Save Questions Exit Submit Assignment for Grading Problem 12-08 Question 1 of 1 1. Check My Work eBook Problem 12-08 Financing Deficit Stevens Textile Corporation's 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 (Thousands of Dollars) Cash $ 1,080 Accounts payable Receivables 6,480 Accruals Inventories 9,000 Line of credit Total current assets $16,560 Net fixed assets 12,600 2,880 Notes payable Total current liabilities $29,160 0 2,100 $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings Total assets $ 4,320 Total liabilities and equity 12,860 $29,160 Income Statement for January 1 - December 31, 2016 (Thousands of Dollars) Sales Operating costs Earnings before interest and taxes Interest Pre-tax earnings Taxes (40%) Net income Dividends (45%) Addition to retained earnings $36,000 32,440 $ 3,560 460 $ 3,100 1,240 $ 1,860 $ 837 $ 1,023 a. Suppose 2017 sales are projected to increase by 20% over 2016 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2017. The interest rate on all debt is 11%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2016, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as a line of credit. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Round your answers to the nearest dollar. Do not round intermediate calculations. http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=assignments&takeAssignmentSessionLocator=assignment-take 1/2 12/10/2017 CengageNOW | Online teaching and learning resource from Cengage Learning Total assets $ 33534 AFN $ 2128 b. What is the resulting total forecasted amount of notes payable? Round your answer to the nearest dollar. Do not round intermediate calculations. Notes payable $ 4228 c. In your answers to Parts a and b, you should not have charged any interest on the additional debt added during 2017 because it was assumed that the new debt was added at the end of the year. But now suppose that the new debt is added throughout the year. Don't do any calculations, but how would this change the answers to parts a and b? If debt is added throughout the year rather than only at the end of the year, interest expense will be higher income to be lower the AFN to be higher than in the projections of part a. This would cause net , the addition to retained earnings to be lower . Thus, you would have to add in , and new debt. Hide Feedback Partially Correct Check My Work Icon Key Problem 12-08 Question 1 of 1 Save Cengage Learning Exit Submit Assignment for Grading Cengage Technical Support http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=assignments&takeAssignmentSessionLocator=assignment-take 2/2