Pro forma balance sheet-Basic Leonard Industries wishes to prepare a pro forma balance sheet for Docomber 31, 2020 The firm expects 2020 sales to tota $3,000,000. The following information has been gathered (1) A minimum cash balance of $50,000 is desired (2) Marketable securities are expected to remain unchanged. (3) Accounts receivable represent 100% of sales (4) Inventories represent 120% of sales (5) A new machine costing $90,000 will be acquired during 2020. Total depreciation for the year will be $32,000 (6) Accounts payable represent 140% of sales 6) Accruals, other current liabilities, long-term debt, and common stock are expected to remain unchanged (8) The firm's net profit margin is 40%, and it expocts to pay out $70,000 in cash dividends during 2020 (9) The December 31, 2019, balance sheet follows also the mental anarh to neonare a no forma halance sheet Mater December 31 2020 Incontri industries a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31, 2020, for Leonard Industnes Complete the assets part of the pro forma balance sheet for Leonard Industries for December 31, 20 Round to the nearest dollar) Pro Forma Balance Sheet Leonard Industries December 31, 2020 below Assets Current assets Cash $ Marketable securities Accounts receivable Inyontores Total current assots $ Next (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Leonard Industries Balance Sheet December 31, 2019 Liabilities and Stockholders' Equity $45,000 Accounts payable 15,000 Accruals 255,000 Other current liabilities 340,000 Total current liabilities $655,000 Long term debt 600,000 Common stock Retained earnings $1,255,000 Total liabilities and stockholders' equity $395,000 60,000 30,000 $485,000 350,000 200,000 220,000 $1,255,000 Total assets Print Done b. How much if any additional financing will Leonard Industries require in 2020? Discuss (Select all the answers that apply) A. Leonard Industries retained earnings are enough to cover all of the company's desired level of certain accounts It financing cannot be obtained one or more of the constraints must be changed C. Based on the forecast and desired level of certain accounts the financial manager should arrange for credit of $58,000 D. Based on the forecast and desired level of certain accounts, the financial manager should arrange for credit of $53,000 c. Could Leonard Industries adjust its planned 20202016 dividend to avoid the situation described in part b? Explain how (Select all the answers that apply) A Leonard Industries' retained earnings are enough to cover all of the company's desired level of certain accounts including dividends B. By reducing the dividend, more cash is retained by the firm to cover the growth in other asset accounts Ci Leonard Industnes reduced its 2020 dividend to $17,000 or less the firm would not need any additional financing D. I Leonard Industries reduced its 2020 dividend to $22,000 or less the firm would not need any additional financing
