Question

The Global Growth Corporation is planning for next year and wants you to help them prepare a Pro Forma Balance Sheet for 2011. Their current Balance Sheet is shown below along with some pre-determined changes in key balance sheet accounts. How will you proceed?


Next year, the firm will increase its Plant, Property, and Equipment (PPE) by $7,000,000 with a plant expansion. The inventories will grow by 70%, but accounts payables will grow by 60%, and marketable securities will be reduced by 50% 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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  • CreatedMay 08, 2014
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