Pro forma balance sheet: Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2020. The firm expects 2020 sales to total $3,000,000. The following information has been gathered: (1) A minimum cash balance of $50,000 is desired. (2) Marketable securities are (3) Accounts receivable represent 10% of sales. (4) Inventories represent 12 % of sales. (5) A new machine costing $90,000 will be acquired during 2020. Total deprecia- tion for the year will be $32,000 (6) Accounts payable represent 14 % of sales. (7) Accruals, other current liabilities, long-term debt, and common stock are expected (8) The firm's net dividends during 2020. (9) The December 31, 2019, balance sheet follows. P4-18 expected to remain unchanged. to remain unchanged. profit margin is 4%, and it expects to pay out $70,000 in cash T TWO Financial Tools foomard Indnstries Balance Sheet December 31, 2019 Liabilities and stockholders' equity S 395,000 Assete Accounts payable S 45,000 Cash 60,000 Accruals 15,000 Marketable secarities 30,000 Other current liabilities 255,000 Accounts receivable $485,000 350,000 $ 835,000 200,000 220,000 Total current liabilities 340,000 inventories Long-term debt Total iabilities 655,000 Total current assets 600,000 $1,255,000 Net fixed assets Comnon stock Total assets Reraed earnings Total Iiabilities and stockholders' equity $1,255,000 a. Use the judgmental approach to prepare a pro forma balance sheet dated Decem ber 31, 2020, for Leonard Industries b. How much, if any, additional financing will Leonard Industries require in 2020 Discuss c. Could Leonard Industries adjust its planned 2020 dividend to avoid the situation described in part b? Explain how. P4-10