ABC Bottling December 31st balance sheet is given below: Cash $15 Accounts receivable $25 Inventory $50 Net
Question:
ABC Bottling December 31st balance sheet is given below:
- Cash $15
- Accounts receivable $25
- Inventory $50
- Net fixed assets $ 80
- Total assets$170
- Accounts payable $30
- Notes payable $20
- Accrued wages and taxes $15
- Long-term debt $35
- Common equity $70
- Total liabilities and equity $170
Sales during the past year were $250, and they are expected to rise by 50 percent to $375 during next year. Also, during last year fixed assets were being utilized to only 70 percent of capacity, so ABC could have supported $250 of sales with fixed assets that were only 70 percent of last year's actual fixed assets. Assume that ABC's profit margin will remain constant at 6.0 percent and that the company will continue to pay out 40 percent of its earnings as dividends. To the nearest whole dollar, what amount of non-spontaneous, additional funds (AFN) will be needed during the next year (use pro-forma method)? ( please show work)
Financial Accounting Information For Decisions
ISBN: 978-0324672701
6th Edition
Authors: Robert w Ingram, Thomas L Albright