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PLEASE ANSWER BOTH PARTS (A & B)

??Peabody?& Peabody has 2015 sales of $10.3 million. It wishes to analyze expected performance and financing needs for 2017?2 years ahead. Given the following?information, respond to parts a. and b.

?(1) The percents of sales for items that vary directly with sales are as?follows: Accounts?receivable; 12.1%?, ?Inventory; 18.1%?; Accounts?payable, 13.8%?; Net profit?margin, 3.5%.

?(2) Marketable securities and other current liabilities are expected to remain unchanged.

?(3) A minimum cash balance of $483,000 is desired.

?(4) A new machine costing $653,000 will be acquired in?2016, and equipment costing $852,000 will be purchased in 2017. Total depreciation in 2016 is forecast as $288,000?, and in 2017 $394,000 of depreciation will be taken.

?(5) Accruals are expected to rise to $505,000 by the end of 2017.

?(6) No sale or retirement of?long-term debt is expected.

?(7) No sale or repurchase of common stock is expected.

?(8) The dividend payout of 50% of net profits is expected to continue.

?(9) Sales are expected to be $11.2 million in 2016 and $11.2 million in 2017.

?(10) The December?31, 2015, balance sheet is here LOADING...

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a. Prepare a pro forma balance sheet dated December?31, 2017.

b. Discuss the financing changes suggested by the statement prepared in part ?(a?).

1 Data Table X (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Leonard Industries Balance Sheet December 31, 2015 Assets Liabilities and Stockholders' Equity Cash $402,000 Accounts payable $1.307,000 Marketable securities 203,000 Accruals 400,000 Accounts receivable 1,203,000 Other current liabilities 80.300 Inventories 1,795,000 Total current liabilities $1.877.300 Total current assets $3,603,000 Long-term debt 2.007,700 Net fixed assets 3,098,000 Common stock 3,716,000 Total liabilities and Total assets $7,601,000 stockholders' equity $7,601,000 Print Done