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The whole chart needs to be filled in and I dont understand the increase factors in order to get the amounts for 2020. Thank you.
The whole chart needs to be filled in and I dont understand the increase factors in order to get the amounts for 2020. Thank you.
16 17 SOLUTION: 18 19 Assets X or + Increase Factor 20 Cash $100.00 X 21 Accounts receivable 200.00 X 22 Inventories 200.00 23 Net fixed assets* 500.00 24 Total assets $1,000.00 25 26 Liabilities and Stockholders' Equity 27 Accounts payable $50.00 28 Accruals 50.00 29 Notes payable 150.00 30 Long-term debt 400.00 31 Common stock 100.00 32 Retained earnings** 250.00 33 Total liabilities and Equity $1,000.00 34 35 AFN = Total Assets - Total Liabilities and Equity $0.00 36 37 Hint: 38 ** Addition to Retained earnings = (Profit Margin)(sales next year)(1-payout ratio) 39 Chapter 12: Intermediate Problem 12-6 (page 530) The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet (see attached Excel sheet): Cash $100 Accounts payable $50 Accounts receivable 200 Notes payable 150 Inventories 200 Accruals 50 Net fixed assets 500 Long-term debt 400 Common stock 100 Retained 250 earnings Total assets $1,000 Total liabilities and equity $1,000 Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after- tax profit margin is forecast to be 5% and its payout ratio to be 60%. What is Booth's additional funds needed (AFN) for the coming year? 2019 X X XX++++ 2020 $0.00 $0.00Step by Step Solution
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