Forecast 2020 income statement and balance sheet using the percent of sales method and the following assumptions:  (1) sales in 2020 will be 12.5

Forecast 2020 income statement and balance sheet using the percent of sales method and the following assumptions: 

(1) sales in 2020 will be 12.5 million; 

(2) tax rate keeps the same; 

(3) each item that changes with sales will be the 2 year average percentage of sales; 

(4) fixed asset will increase $1,000,000 with a 10 year straight line depreciation schedule with 0 salvage value;

(5) the common stock dividends will be $202,000; 

(6) interest rate on short-term and long-term debt will be 9%; 

(7) Cash, short-term investment will be the same as 2019; 

(8) COGS, Selling G&A expenses, A/R, inventory, A/P, Accruals will change in proportion to sales; 

(9) Notes payable and long-term debt will keep the same; and if there is borrowing need, the company will borrow from long-term debt; 

(10) the company will not issue stocks in 2020.

Questions:

a) What is the additional funds needed in 2020? Is this a surplus or deficit or balanced? (Without iteration, or borrowing happens at last day of the year)

b) Assume that the AFN will be absorbed by long-term debt, set up an iterative worksheet to find total accumulated AFN (borrowing happens during the year)

c) Why accumulated AFN increases in part b)? Please explain the phenomenon.

<a href=” dash lite</a>

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Homework JWI 575: New Business Ventures and Entrepreneurship Academic Submissions and Evaluation© Strayer University. All Rights Reserved.

Homework  JWI 575: New Business Ventures and Entrepreneurship Academic Submissions and Evaluation © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.