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please show full calculation thanks The Western Wear Company has the following financial statements, which are representative of the company's historical average. Income Statement Sales
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The Western Wear Company has the following financial statements, which are representative of the company's historical average. Income Statement Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Balance Sheet Assets Cash Accounts receivable Inventory Current assets Capital assets $7,000 24,000 29,000 $60,000 84,000 $250,000 203,100 $46,900 3,400 $43,500 11,000 $32,500 $9,750 Liabilities and Shareholders' Equity Accounts payable Accrued wages Accrued taxes Current liabilities Notes payable $14,400 2,600 13,000 $30,000 8,400 Long-term debt Common stock Retained earnings Total assets$144,000 Total liabilities and equity$144,000 Western Wear is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of capital assets; instead, it will be done through more efficient asset utilization in the existing stores. Of liabilities, only current liabilities vary directly with sales. (Show all your workings and calculations) a. Using a percent-of-sales method, determine whether Western Wear has external financing needs. 22,000 34,000 49,600 b. Prepare a pro forma balance sheet with any financing adjustment made to notes payable and excess, if any, shall reduce long term debt. (Do not round off intermediate value. Use two decimals for final answer) Step by Step Solution
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