Suppose 2017 sales are projected to increase by 10% over 2016 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2017. The interest rate on all debt is 11%, and cash earns no interest income. Assume that all additional debt in the form of a line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2016, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as a line of credit. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Determine the additional funds needed. Round your answers to the nearest dollar. Do not round intermediate calculations.

AFN------?

What is the resulting total forecasted amount of the line of credit? Round your answer to the nearest dollar. Do not round intermediate calculations. Line of credit $ -------?

Financing Deficit Stevens Textile Corporation's 2016 financial statements are shown below Balance Sheet as of December 31, 2016 (Thousands of Dollars) Cash Receivables Inventories $4,320 2,880 $ 1,080 Accounts payable 6,480 Accruals 9,000 Line of credit 2,100 $9,300 3,500 3,500 12,860 $29,160 Income Statement for January 1 - December 31, 2016 (Thousands of Dollars) Total current assets $16,560 Notes payable Net fixed assets 12,600 Total current liabilities Mortgage bonds Common stock Retained earnings Total assets $29,160 Total liabilities and equity $36,000 32,440 $ 3,560 460 3,100 1,240 $ 1,860 $837 $ 1,023 Sales Operating costs Earnings before interest and taxes Interest Pre-tax earnings Taxes (40%) Net income Dividends (45%) Addition to retained earnings