Pro forma balance sheetBasic Leonard Industries wishes to prepare a pro forma balance sheet for next year. The firm expects sales to total $3,000,000. The following information has been gathered.

Pro forma balance sheet-Basic Leonard Industries wishes to prepare a pro forma balance sheet for next year. The firm expects sales to total $3,000,000. The following information has been gathered. (1) A minimum cash balance of $49,600 is desired. (2) Marketable securities will remain unchanged. (3) Accounts receivable represent 9.9% of sales. (4) Inventories represent 12.2% of sales. (5) Leonard will acquire a new machine costing $89,800. Total depreciation for the year will be $31,600. (6) Accounts payable represent 14.3% of sales. (7) Accruals, other current liabilities, long-term debt, and common stock will remain unchanged. (8) The firm's net profit margin is 4.1%, and it expects to pay out $70,000 in cash dividends next year. (9) The most recent balance sheet follows E. a. Use the judgmental approach to prepare a pro forma balance sheet for next year. b. How much, if any, additional financing will Leonard Industries require? Discuss. c. Could Leonard Industries adjust its planned dividend to avoid the situation described in part b? Explain how. Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Leonard Industries Balance Sheet Liabilities and Stockholders' Equity $45,400 Accounts payable 15,500 Accruals 255,000 Other current liabilities 339,500 Total current liabilities $655,400 Long-term debt 599,800 Common stock Retained earnings $1,255,200 Total liabilities and stockholders' equity $395,000 60,100 30,200 $485,300 350,600 199,600 219,700 $1,255,200 Total assets a. Use the judgmental approach to prepare a pro forma balance sheet for Leonard Industries. Complete the assets part of the pro forma balance sheet for Leonard Industries below: (Round to the nearest dolla Pro Forma Balance Sheet Leonard Industries Assets Current assets Cash 1 Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Total assets TA Complete the liabilities and stockholders' equity part of the pro forma balance sheet for Leonard Industries below: Pro Forma Balance Sheet Leonard Industries Liabilities and stockholders' equity Current liabilities Accounts payable $ Accruals Other current liabilities III Total current liabilities $ Long-term debt Total liabilities $ Common stock 1 Retained earnings $ Total stockholders' equity External funds required Total liabilities and stockholders' equity $ b. How much, if any, additional financing will Leonard Industries require? Discuss. (Select all the answers that apply.) A. If financing cannot be obtained, one or more of the constraints must be changed. B. Based on the forecast and desired level of certain accounts, the financial manager should arrange for credit of $43,900. C. Based on the forecast and desired level of certain accounts, the financial manager should arrange for credit of $48,900. D. Leonard Industries' retained earnings are enough to cover all of the company's desired level of certain accounts. c. Could Leonard Industries adjust its planned 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. C. If Leonard Industries reduced its dividend to $26,100 or less, the firm would not need any additional financing. D. If Leonard Industries reduced its dividend to $31,100 or less, the firm would not need any additional financing