Please answer 2 questions. Show calculations

1. Financing Deficit Garlington Technologies Inc.'s 2013 financial statements are shown below: Balance Sheet as of December 31, 2013 Cash Receivables Inventories Total current assets Fixed assets Total assets $ 180,000 360,000 720,000 $1,260,000 1,440,000 Accounts payable Notes payable Line of credit Accruals Total current liabilities Common stock Retained earnings $2,700,000 Total liabilities and equity $ 360,000 156,000 0 180,000 $ 696,000 1,800,000 204,000 $2,700,000 Income Statement for December 31, 2013 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (40%) Net income Dividends $3,600,000 3,279,720 $ 320,280 18,280 $ 302,000 120,800 181,200 $ 108,000 Suppose that in 2014 sales increase by 20% over 2013 sales and that 2014 dividends will increase to $182,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2013. Use an interest rate of 12%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the AFN will be in the of form of a line of credit. Round your answers to the nearest dollar. Do not round intermediate calculations. Garlington Technologies Inc. Pro Forma Income Statement December 31, 2014 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (40%) Net income Dividends: Addition to RE: $ $ $ $ $ $ $ $ $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2014 Cash Receivables Inventories Total current assets Fixed assets Total assets Accounts payable Notes payable Accruals Total current liabilities Common stock Retained earnings Total liabilities and equity $ $ $ $ $ $ $ $ $ $ $ $ $ 2. Long-Term Financing Needed At year-end 2013, Wallace Landscaping's total assets were $1.4 million and its accounts payable were $330,000. Sales, which in 2013 were $2.2 million, are expected to increase by 30% in 2014. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $470,000 in 2013, and retained earnings were $280,000. Wallace has arranged to sell $165,000 of new common stock in 2014 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2014. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 5%, and 60% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt in 2013? Round your answer to the nearest dollar. $ What were Wallace's total liabilities in 2013? Round your answer to the nearest dollar. $ b. How much new long-term debt financing will be needed in 2014? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar. $