The Global Growth Corporation is planning for next year and wants you to help them prepare a Pro Forma Balance Sheet for 2011. Their current Balance Sheet is shown below along with some pre-determined changes in key balance sheet accounts. How will you proceed?

Next year, the firm will increase its Plant, Property, and Equipment (PPE) by $7,000,000 with a plant expansion. The inventories will grow by 70%, but accounts payables will grow by 60%, and marketable securities will be reduced by 50% to help finance the expansion. If all other asset accounts remain the same and long-term debt will be used to finance the remaining costs of the expansion (no change in common stock or retained earnings), prepare a pro forma balance sheet for 2011. How much additional debt will be estimated using this pro forma balancesheet?

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The Global Growth Corporation Balance Sheet for the Year Ending 2010 2010 S1,500,000 Current Assets Cash Marketable Securities Accounts Receivable Inventories Total Current Assets 830,000 3.450,000 2,500,000 $8,280,000 Long-term Assets Plant, Property & Equip. Goodwil1 Intangible Assets Total Long-term Assets S8,500,000 3,500,000 1,350,000 $13.350.000 $21,630.000 TOTAL ASSETS Current Liabilities Accounts Payable Other Current Liabilies S1,350,000 Total Current Liabilities S6,475,000 $5,125,000 Long-tem Liabilities S3,200,000 Long-Term Debt Other Long-tem Liab. S1,650,000 Total Long-Term Liabilities S4,850,000 S11,325,000 TOTAL LIABILITIES Owner's Equity S2,500,000 S7,805,000 Common Stock Retained Earnings TOTAL OWNER'S EQUITY TOTAL LIABILITIES & OWNER'S EQUITY S10.305,000 $21.630,000