You are the financial manager for a firm with the following balance sheet:

Assets Liabilities and Equity

Cash $ 10,000 Accounts payable $ 15,000

Marketable securities 10,000 Accruals 10,000

Accounts receivable 30,000 Short-term bank loan 15,000

Inventory 20,000 Long-term debt 20,000

Plant and equipment 30,000 Common stock 10,000

Retained earnings 30,000

$100,000 $100,000

Sales are currently $100,000 and you expect them to increase by 20% to $120,000. You have previously use percent of sales to forecast selected assets and liabilities (i.e., accounts receivable, inventory, accounts payable, and accruals).

Other factors that will affect your forecast include:

1. The short-term bank loan must be retired and cannot be renewed.

2. The plant and equipment are aging and must be expanded by $20,000 to meet the anticipated sales increase.

3. The net profit margin on sales is 20%.

4. The firm does not distribute dividends.

5. You want to maintain the holdings of marketable securities. If the firm needs funds, you could liquidate the marketable securities, but would prefer to issue additional long-term debt if the terms of the existing debt permitted the issue of new long-term debt.

To help forecast the firm's future financial position, fill in all the anticipated entries prior to any changes in the firm's debt structure.

(To reduce the math, some forecasted numbers are provided. Since the entries are forecasted and not realized, the sum of the two sides need not balance.)