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

Improving Business PerformanceWeek 2 DiscussionColleagues 1 Lyndsay

Improving Business Performance Week 2 Discussion Colleagues 1 Lyndsay Camaroto Hello, The organization I chose is the one I work at as well, Even though for me I have had great experiences as an employee and have really grown in my career. From a Moral standpoint, there are instances where

PIQ#3Discusion 3 Note: followed two responses  Your initial response must be a minimum of 300 words. Healthcare organizations use various Key

PIQ#3Discusion 3 Note: followed two responses  Your initial response must be a minimum of 300 words. Healthcare organizations use various Key Performance Indicators (KPIs) and Quality Metrics to measure performance. This activity allows you to practice researching and using data to inform quality improvement decisions. For this discussion board: 1. Select one