SLM, Inc., with sales of $1,000, has the following balance sheet:

It earns 10 percent on sales (after taxes) and pays no dividends.
a. Determine the balance sheet entries for sales of $1,500 using the percent of sales method of forecasting.
b. Will the firm need external financing to grow to sales of $1,500?
c. Construct the new balance sheet and use newly issued long-term debt to cover any financial deficiency.

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SLM, Incorporated Balance Sheet as of 12/31/X0 Assets Accounts receivable 200 Inventory Plant 400 800 $1,400 Liabilities and Equity Trade accounts payable Long-term debt Equity 200 600 600 1,400