Problem 2.1 Balance out the Balance Sheet correctly. You will to manually adjust either/both two line items in the Balance Sheet.

- These two line items are: CASH & EQUIVALENTS ON THE ASSET SIDE AND "REVOLVING LINE OF CREDIT" ON THE LIABILITY SIDE WITHIN CURRENT ASSETS.

Your manual adjustments are based upon the following considerations:

- If assets are less than (Liabilities + Equity), then you must increase the cash & equivalents until assets equal (Liabilities + Equity) for that year. Do this for each of the 5 years shown.

- If assets are greater than (Liabilities + Equity), then you must increase the revolving line until (Liabilities + Equity) equal assets that year. Do this for each of the five years shown.

Please show your work/calculations.

Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Income Statement Sales Costs of Goods Sold Depreciation Expense Interest Expense on Debt & Revolver Interest Income on Cash & Mkt Sec Profit before tax Taxes Profit after tax Dividends Retained Earnings 10,000,000 10,300,000 10,609,000 10,927,270 11,255,088 11,592,741 (5,000,000) (5,150,000) (5,304,500) (5,463,635) (5,627,544) (5,796,370) (1,000,000) (1,030,000) (1,060,900) (1,092,727) (1,125,509) (1,159,274) (320,000) (332,407) (357,664) (383,819) (410,901) (438,939) 64,000 83,978 124,708 167,013 210,942 256,548 3,744,000 3,871,571 4,010,645 4,154,102 4,302,076 4,454,705 (1,310,400) (1,355,050) (1,403,726) (1,453,936) (1,505,727) (1,559,147) 2,433,600 2,516,521 2,606,919 2,700,166 2,796,350 2,895,558 (1,946,880) (2,013,217) (2,085,535) (2,160,133) (2,237,080) (2,316,447) 486,720 503,304 521,384 540,033 559,270 579,112 800,000 1,500,000 1,299,447 1,545,000 1,818,261 1,591,350 2,357,063 1,639,091 2,916,493 1,688,263 3,497,211 1,738,911 Balance Sheet Cash Current Assets (A/R & Inventory) Other Assets Fixed Assets: At Cost Accumulated Depreciation Net Fixed Assets Total Assets 10,700,000 11,961,000 13,259,830 14,597,625 15,975,554 17,394,820 -3,000,000 -4,030,000 -5,090,900 -6,183,627 -7,309,136 -8,468,410 7,700,000 7,931,000 8,168,930 8,413,998 8,666,418 8,926,410 10,000,000 10,775,447 11,578,541 12,410,151 13,271,174 14,162,532 0 0 0 0 0 0 Current Liabilities (Revolver & A/P) Revolving Line of Credit ("Revolver") Accounts Payable ("A/P") Debt Stock Accumulated Retained Earnings Total Liabilities and Equity (Internal Check A=L+E?) 800,000 824,000 848,720 874,182 900,407 927,419 3,200,000 3,448,143 3,705,133 3,971,248 4,246,776 4,532,010 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 4,500,000 1,500,000 2,003,304 2,524,688 3,064,721 3,623,991 4,203,103 10,000,000 10,775,447 11,578,541 12,410,151 13,271,174 14,162,532 0 0 0 0 0 0