BBP, Inc., with sales of $600,000, has the following balance sheet: BBP, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 30,000 Accounts payable $ 18,000 Accounts receivable 90,000 Accruals 36,000 Inventory 108,000 Notes payable 70,000 Current assets 228,000 Current liabilities 124,000 Fixed assets 180,000 Common stock 120,000 Retained earnings 164,000 Total assets $ 408,000 Total liabilities and equity $ 408,000 The firm earns 15 percent on sales and distributes 25 percent of its earnings. Using the percent of sales, determine whether the firm will need external funds and forecast the new balance sheet for sales of $780,000 assuming that cash changes with sales and that the firm is not operating at capacity. Use newly issued short-term debt to cover any needs for additional finance. If the firm has excess funds, add them to cash. Round your answers to the nearest dollar. Enter your answers as positive values. will the firm need external funds? If so how much will they need? Fill In the Balance Sheet BBP, Incorporated Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Cash $ Accounts payable $ Accounts receivable Accruals Inventory Notes payable Current assets Current liabilities Fixed assets Common stock Retained earnings Total assets $ Total liabilities and equity $ Would your answers be different if the firm distributed all of its earnings? Round your answers to the nearest dollar. Enter your answer as a positive value. If management distributed all the firm's earnings will it need external funds? If so how much?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

BBP, Inc., with sales of $600,000, has the following balance sheet:

BBP, Incorporated Balance Sheet as of 12/31/X0
Assets		Liabilities and Equity
Cash	$	30,000	Accounts payable	$	18,000
Accounts receivable		90,000	Accruals		36,000
Inventory		108,000	Notes payable		70,000
Current assets		228,000	Current liabilities		124,000
Fixed assets		180,000	Common stock		120,000
			Retained earnings		164,000
Total assets	$	408,000	Total liabilities and equity	$	408,000

The firm earns 15 percent on sales and distributes 25 percent of its earnings. Using the percent of sales, determine whether the firm will need external funds and forecast the new balance sheet for sales of $780,000 assuming that cash changes with sales and that the firm is not operating at capacity. Use newly issued short-term debt to cover any needs for additional finance. If the firm has excess funds, add them to cash. Round your answers to the nearest dollar. Enter your answers as positive values.

will the firm need external funds? If so how much will they need?

Fill In the Balance Sheet

BBP, Incorporated Balance Sheet as of 12/31/X1
Assets		Liabilities and Equity
Cash	$		Accounts payable	$
Accounts receivable			Accruals
Inventory			Notes payable
Current assets			Current liabilities
Fixed assets			Common stock
			Retained earnings
Total assets	$		Total liabilities and equity	$

Would your answers be different if the firm distributed all of its earnings? Round your answers to the nearest dollar. Enter your answer as a positive value.

If management distributed all the firm's earnings will it need external funds? If so how much?

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