Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
The Longbranch Western Wear Company has the following financial statements, which are representative of the company s historical average. Income Statement Sales $ 2 0
The Longbranch Western Wear Company has the following financial statements, which are representative of the companys historical average. Income Statement Sales $ Expenses Earnings before interest and taxes $ Interest Earnings before taxes $ Taxes Earnings after taxes $ Dividends $ Balance Sheet Assets Liabilities and Shareholders' Equity Cash $ Accounts payable $ Accounts receivable Accrued wages Inventory Accrued taxes Current assets $ Current liabilities $ Capital assets Notes payable Longterm debt Common stock Retained earnings Total assets $ Total liabilities and equity $ Longbranch is expecting a percent increase in sales next year, and management is concerned about the companys need for external funds. The increase in sales is expected to be carried out without any expansion of capital assets; instead, it will be done through more efficient asset utilization in the existing stores. Of liabilities, only current liabilities vary directly with sales. a Using a percentofsales method, determine whether Longbranch Western Wear has external financing needs. Input the amount as a positive value. The firm has $ in surplus funds b Prepare a pro forma balance sheet with any financing adjustment made to notes payable and excess, if any, shall reduce long term debt. Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity. Do not leave any empty spaces; input a wherever it is required. Balance Sheet Current assets Liabilities Cash $ Accounts payable $ Accounts receivable Accrued wages Inventory Accrued taxes Current assets $ Current liabilities $ Capital Assets Notes payable Longterm debt $ Common stock Retained earnings Total assets $ Total liabilities and equity $ c Calculate the current ratio and total debt to assets ratio for each year. Round the final answers to decimal places. Year Year Current ratio X X Total debt assets
The Longbranch Western Wear Company has the following financial statements, which are representative of the companys historical average.
Income Statement
Sales $
Expenses
Earnings before interest and taxes $
Interest
Earnings before taxes $
Taxes
Earnings after taxes $
Dividends $
Balance Sheet
Assets Liabilities and Shareholders' Equity
Cash $ Accounts payable $
Accounts receivable Accrued wages
Inventory Accrued taxes
Current assets $ Current liabilities $
Capital assets Notes payable
Longterm debt
Common stock
Retained earnings
Total assets $ Total liabilities and equity $
Longbranch is expecting a percent increase in sales next year, and management is concerned about the companys need for external funds. The increase in sales is expected to be carried out without any expansion of capital assets; instead, it will be done through more efficient asset utilization in the existing stores. Of liabilities, only current liabilities vary directly with sales.
a Using a percentofsales method, determine whether Longbranch Western Wear has external financing needs. Input the amount as a positive value.
The firm
has
$
in
surplus funds
b Prepare a pro forma balance sheet with any financing adjustment made to notes payable and excess, if any, shall reduce long term debt. Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity. Do not leave any empty spaces; input a wherever it is required.
Balance Sheet
Current assets Liabilities
Cash
$
Accounts payable
$
Accounts receivable
Accrued wages
Inventory
Accrued taxes
Current assets $
Current liabilities $
Capital Assets
Notes payable
Longterm debt
$
Common stock
Retained earnings
Total assets $
Total liabilities and equity $
c Calculate the current ratio and total debt to assets ratio for each year. Round the final answers to decimal places.
Year Year
Current ratio
X
X
Total debt assets
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started