Question: Next year California Cement Company will increase its Plant Property
Next year, California Cement Company will increase its Plant, Property, and Equipment (PPE) by $6,000,000 with a plant expansion. The inventories will grow by 80%, accounts receivable will grow by 70%, and marketable securities will be reduced by 60% to help finance the expansion. If all other asset accounts remain the same and long-term debt will be used to finance the remaining costs of the expansion (no change in common stock or retained earnings), prepare a pro forma balance sheet for 2011. How much additional debt will be estimated using this pro forma balancesheet?
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