FIN3350 Problem Solving (50 points) 1. (15 points) Following are financial statements (historical and forecasted) for the Rapa Nui Entertainment Corporation Income Statement Net Sales Cost of Goods Sold Gross Profit General & Administrative Expenses Marketing Depreciation Earnings Before Interest and Taxes Interest Earnings Before Taxes Income Taxes (40% rate) Net Income Forecast 2020 $1,500,000 -850.000 650.000 -250.000 -206,000 -50.000 144.000 -84.000 60,000 -24.000 $36.000 Balance Sheet Cash Accounts Receivable Inventories Total Current Assets Fixed Assets, Net Total Assets 125,000 125.000 100.000 350,000 500.000 100,000 150.000 S1.100.000 Balance sheet 2019 $20,000 Accounts Payable 250,000 Accrued Liabilities 350.000 Bank loan 620,000 Total Current Liabilities 480.000 Long-Term Debt S1.100.000 Common Stock (S1 par) Retained Earnings Total Liabilities & Equity Forecast 2020 $30,000 Accounts Payable 290,000 Accrued Liabilities 450,000 Bank loan 770,000 Total Current Liabilities 500,000 Long-Term Debt S1.270.000 Common Stock (S1 par) Retained Earnings Total Liabilities & Equity Cash Accounts Receivable Inventories Total Current Assets Fixed Assets, Net Total Assets 140,000 130,000 120.000 390,000 600,000 100,000 180.000 $1.270.000 Assume that the cash account includes only required cash. Determine the dollar amount of equity valuation cash flow for 2020. 3