Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity ent assets Current liabilities sh counts receivable $ 21,940 44,880 Accounts payable Notes payable $ 56,100 15,300 entory 104,960 Total $ 71,400 otal $ 171,780 Long-term debt $ 143,000 d assets t plant and Owners' equity Common stock and paid-in $436,000 $ 121,000 oment

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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RETRO MACHINE, INC.
Balance Sheet as of December 31, 2020
Assets
Liabilities and Owners' Equity
Current assets
Current liabilities
$ 21,940
44,880
Cash
Accounts payable
Notes payable
$56,100
15,300
Accounts receivable
Inventory
104,960
Total
$ 71,400
Total
$ 171,780 Long-term debt
$ 143,000
Fixed assets
Owners' equity
Common stock and paid-in
surplus
Retained earnings
Net plant and
equipment
$436,000
$ 121,000
272,380
Total
$393,380
Total liabilities and owners'
equity
Total assets
$ 607,780
$ 607,780
If the firm is operating at full capacity and no new debt or equity is issued, what is the
external financing needed to support the 25 percent growth rate in sales? (Do not round
intermediate calculations.)
EFN
Transcribed Image Text:RETRO MACHINE, INC. Balance Sheet as of December 31, 2020 Assets Liabilities and Owners' Equity Current assets Current liabilities $ 21,940 44,880 Cash Accounts payable Notes payable $56,100 15,300 Accounts receivable Inventory 104,960 Total $ 71,400 Total $ 171,780 Long-term debt $ 143,000 Fixed assets Owners' equity Common stock and paid-in surplus Retained earnings Net plant and equipment $436,000 $ 121,000 272,380 Total $393,380 Total liabilities and owners' equity Total assets $ 607,780 $ 607,780 If the firm is operating at full capacity and no new debt or equity is issued, what is the external financing needed to support the 25 percent growth rate in sales? (Do not round intermediate calculations.) EFN
The most recent financial statements for Retro Machine, Inc., follow. Sales for 2021 are
projected to grow by 25 percent. Interest expense will remain constant; the tax rate and
the dividend payout rate will also remain constant. Costs, other expenses, current
assets, fixed assets, and accounts payable increase spontaneously with sales.
RETRO MACHINE, INC.
2020 Income Statement
Sales
Costs
$760,000
595,000
31,000
Other expenses
Earnings before interest
and taxes
Interest paid
$ 134,000
27,000
Taxable income
$ 107,000
23,540
Taxes (22%)
Net income
$ 83,460
Dividends
$25,038
Addition to retained
58,422
earnings
Transcribed Image Text:The most recent financial statements for Retro Machine, Inc., follow. Sales for 2021 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. RETRO MACHINE, INC. 2020 Income Statement Sales Costs $760,000 595,000 31,000 Other expenses Earnings before interest and taxes Interest paid $ 134,000 27,000 Taxable income $ 107,000 23,540 Taxes (22%) Net income $ 83,460 Dividends $25,038 Addition to retained 58,422 earnings
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