The Longbranch Western Wear Company has the following financial statements, which are representative of the company's historical average Income Statement Sales $250,000 194,900 $ 55,100 2,600 $ 52,500 15,000 $ 37,500 $ 16,875 Expenses Earnings before interest and taxes Interest Earnings before taxes es Earnings after taxes Dividends Balance Sheet Liabilities and Shareholders' Equity Assets $8,000 Accounts payable Accrued wages $6,600 Cash Accounts receivable 16,000 1,800 6,600 $15,000 Inventory Accrued taxes 21,000 $45,000 76,000 Current assets Current liabilities Capital assets Notes payable Long-term debt 7,600 18,000 tock Retained earnings 54,400 Total liabilities and equity $121,000 $121,000 Total assets Longbranch is expecting a 20 percent increase in sales next year, and management is concerned about the company's 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 percent-of-sales method, determine whether Longbranch Western Wear has external financing needs. (Input the amount as a positive value.) The firm needs 43650 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 0 wherever it is required.) Balance Sheet Current assets Liabilities Accounts payable Cash $ 9000 7800 Accrued wages Accounts rece ivable 19200 2100 Accrued taxes Inventory 7800 25200 $ 54000 9600 Current assets Current liabilities |Notes payable Capital Assets 91200 9000 Long-term debt 18000 Common stock 26000 Retained earnings 74650 $154950 $198600 Total liabilities and equity Total assets * * * * c. Calculate the current ratio and total debt to assets ratio for each year. (Round the final answers to 2 decimal places.) Year 2 Year 1 x X 3.00 5.63 Current ratio 33.55 18.43 Total debt/ assets The Longbranch Western Wear Company has the following financial statements, which are representative of the company's historical average Income Statement Sales $250,000 194,900 $ 55,100 2,600 $ 52,500 15,000 $ 37,500 $ 16,875 Expenses Earnings before interest and taxes Interest Earnings before taxes es Earnings after taxes Dividends Balance Sheet Liabilities and Shareholders' Equity Assets $8,000 Accounts payable Accrued wages $6,600 Cash Accounts receivable 16,000 1,800 6,600 $15,000 Inventory Accrued taxes 21,000 $45,000 76,000 Current assets Current liabilities Capital assets Notes payable Long-term debt 7,600 18,000 tock Retained earnings 54,400 Total liabilities and equity $121,000 $121,000 Total assets Longbranch is expecting a 20 percent increase in sales next year, and management is concerned about the company's 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 percent-of-sales method, determine whether Longbranch Western Wear has external financing needs. (Input the amount as a positive value.) The firm needs 43650 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 0 wherever it is required.) Balance Sheet Current assets Liabilities Accounts payable Cash $ 9000 7800 Accrued wages Accounts rece ivable 19200 2100 Accrued taxes Inventory 7800 25200 $ 54000 9600 Current assets Current liabilities |Notes payable Capital Assets 91200 9000 Long-term debt 18000 Common stock 26000 Retained earnings 74650 $154950 $198600 Total liabilities and equity Total assets * * * * c. Calculate the current ratio and total debt to assets ratio for each year. (Round the final answers to 2 decimal places.) Year 2 Year 1 x X 3.00 5.63 Current ratio 33.55 18.43 Total debt/ assets