They have generated sales for 2017 of $35,000 resulting in net income of $15,000. Due to the
Question:
They have generated sales for 2017 of $35,000 resulting in net income of $15,000. Due to the difficulty associated with acquiring raw materials, Silver Spurs has experienced sluggish business that has caused fixed assets to be underutilized. Management thinks it can double sales in 2018 through the introduction of a new product. No new fixed assets will be required and the dividend payout ratio will be 100%. Assume no additional depreciation expense will be taken in 2018. Project next year's balance sheet in the space provided below to:
Determine the additional funding needed (AFN) for this new product. Assume notes payable at the end of 2017 are paid off in 2018.
2017 2018
Current Assets Net Fixed Assets | $15,000 20,000 |
Total Assets | $35,000 |
Accounts Payable | $ 2,000 |
Notes Payable | 1,000 |
Long-Term Debt | 10,000 |
Common Equity | 22,000 |
Total Liabilities/Equity | $35,000 |
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw