2 Problem 4-28 Percent-of-sales method [LO4-3] 33.33 points The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. 00:51:49 eBook Income Statement Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends $280,000 222,800 $ 57,200 7,800 $ 49,400 15,800 $ 33,600 $ dot Hint 6,720 Print References Assets Cash Accounts receivable Inventory Current assets Fixed assets Balance Sheet Liabilities and Stockholders' Equity $ 5,000 Accounts payable 86,000 Accrued wages 77,000 Accrued taxes $ 168,000 Current liabilities 88,000 Notes payable Long-term debt Common stock Retained earnings $ 256,000 Total liabilities and stockholders' equity $ 22,100 1,600 4,300 $ 28,000 7,800 19,000 128,000 73,200 $ 256,000 Total assets Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.) The firm has in surplus funds