Use the following information to create a revised forecast of the year 3 balance sheet for Finns’ Fridges. Cash will increase by the forecast EBITDA amount (see Practice Problem 28); it will be reduced by $1,050 to purchase new equipment, $552 for year 2 payables, and $800 for debt repayment. The property and equipment (net) account will increase by $1,050 (new fridges purchased) but must be reduced by the $1,422 amortization expense. Interest and tax payable will reflect the respective expenses on the forecast income statement (again, see Practice Problem 28). Dividends payable will be $270. Long-term debt will be reduced by $800, and the retained earnings figure is $718. With this revised forecast, determine if any additional external financing is required.

Finns’ Fridges is a company created by twin brothers David and Douglas Finn, who rented small refrigerators to other students in their college dormitory. Use the following statements to answer the questions about Finns’ Fridges.

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Balance Sheet for Finns' Fridges (End of the year indicated) Year 1 ($) Year 2 (S) Assets Cash Property and equipment (net) Total assets Liabilities and Owners' Equity Interest payable Tax payable Dividends payable Long-term debt Total liabilities Common shares Retained earnings Total owners' equity Total liabilities and owners' equity 1,150 3,840 4,990 493 3,888 4,381 160 182 210 2,400 2,952 1,000 429 1,429 4,381 200 200 3,200 3,777 1,000 213 1,213 4,990 Income Statement for Finns' Fridges (For the full year indicated) Year 1 (S) Year 2 ($) 2,200 220 Revenues (net of bad debts) Selling and administrative expenses Loss (stolen equipment) EBITDA Amortization expense EBIT Interest expense Earnings before tax Tax (30%) Net income Earnings per share (100 shares) Dividends per share 1,950 0 160 1,790 1,000 790 200 590 0 1,980 1,212 768 160 608 182 426 4.26 2.10 413 4.13 2.00