Question 3

Please refer to Oscars financial Statements below. All of Oscars cost and current asset accounts vary directly with sales. Sales are projected to increase by ten percent. What is the pro-forma accounts receivable balance for next year?

Oscar's Incredible Eatery ($ thousands)

Income Statement for the Year ending December 31, 2014

Net Sales $17,300

Cost of goods sold $10,600

Depreciation $3,250

Earnings before interest and taxes $3,450

Interest Expense $680

Earnings before taxes $2,770

Taxes $940

Earnings after tax $1,830

Dividends $450

Balance Sheet as of December 31, 2014

Cash 350 Accounts Payable $1,920

Accounts Receivable 940 Long- term debt $3,500

Inventory $2,360 Common Stock $7,500

Total current Assets $3,650 Retained Earnings $1,580

Net fixed assets $10,850

Total Assets $14,500 Total Liability $ Equity $14,500

	a.	$949.00
	b.	$1,034.00
	c.	$1,113.00
	d.	$1,730.00
	e.	$2,670.00