Farnsbeck Inc. is forecasting a 15% increase in sales next year. Assume the company is operating at 100%capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of its NetIncome in dividends and move 40% into retained earningsBased on the Income statement and balance sheet below answer the following questions.ASSETS20202019ASSETS20202019CASH AND MARKETABLE SECURITIESACCOUNTS RECEIVABLEINVENTORIES29,00025,000116,000 100,000145,000 125,000290,000 250,000362,000 350,000CURRENT ASSETSGROSS PLANT AND EQUIPMENTLESS: ACCUMULATED DEPRECIATION130,000 100,000232,000 250,000NET FIXED ASSETSTOTAL ASSETS 522,000 500,000LIABILITIES AND EQUITY90,48034,80025,420CURRENT LAIBILITIES 150,700 142,000145,000 140,000TOTAL LIABILITIES 295,700 282,000150,000 150,00078,000ACCOUNTS PAYABLEACCRURALSNOTES PAYABLE30,00034,000LONG TERM DEBTCOMMON STOCK ($1.00 par)RETAINED EARNINGS76,30068,000TOTAL OWNER'S EQUITY 226,300 218,000TOTAL LIABILITIES AND EQUITY 522,000 500,000INCOME STATEMENT20202019NET REVENUES & SALES (100,000 UNITS)COST OF GOODS SOLDGROSS PROFITFIXED OPERATING EXPENSES (pre depreciation)EBITDA Earnings before Intrest, Taxes, Dep & AmoritDEPRECIATION EXPENSEOPERATING INCOME (EBIT)INTERESTINCOME BEFORE TAXES (EBT)INCOME TAXES (40%)NET INCOME812,000 700,000522,000 450,000290,000 250,000174,200 151,000115,800 | 99,00030,000 25,00085,80014,50074,00014,00071,30060,00028,52024,00042,78034,480Retained Earnings 8,30036,00028,5007,50050,000divNUMBER OF SHARES OUTSTANDING50.000Compute the new level of net income for the company. [Select]Compute the company's addition to retained earnings for the [ Select]year.Compute the new level of total assets required. ( Select]Calculate the new level of current liabilities (Select]Compute the company's new level of retained earnings on the balance sheet ISelect]Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.(Select]

Income statement is among the three financial statement named as cash flow statement and balance.…

capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of Income in dividends and move 40% into retained earnings Based on the Income statement and balance sheet below answer the following questions ASSETS 2020 21 ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES 29,000 25,000 ACCOUNTS RECEIVABLE INVENTORIES 116,000 100,000 145,000 125,000 290,000 250,000 CURRENT ASSETS

capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of Income in dividends and move 40% into retained earnings Based on the Income statement and balance sheet below answer the following questions ASSETS 2020 21 ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES 29,000 25,000 ACCOUNTS RECEIVABLE INVENTORIES 116,000 100,000 145,000 125,000 290,000 250,000 CURRENT ASSETS

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 2P

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Farnsbeck Inc. is forecasting a 15% increase in sales next year. Assume the company is operating at 85% capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of its Net Income in dividends and move 40% into retained earnings Based on the Income statement and balance sheet below answer the following questions. ASSETS 2020 2019 ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES ACCOUNTS RECEIVABLE INVENTORIES 25,000 116,000 100,000 145,000 125,000 290,000 250,000 362,000 350,000 29,000 CURRENT ASSETS GROSS PLANT AND EQUIPMENT 130,000 100,000 232,000 250,000 TOTAL ASSETS 522,000 500,000 LESS: ACCUMULATED DEPRECIATION NET FIXED ASSETS LIABILITIES AND EQUITY 90,480 78,000 ACCOUNTS PAYABLE ACCRURALS NOTES PAYABLE 30,000 34,000 CURRENT LAIBILITIES 150,700 142,000 145,000 140,000 TOTAL LIABILITIES 295,700 282,000 150,000 150,000 34,800 25,420 LONG TERM DEBT COMMON STOCK ($1.00 par) 76,300 68,000 RETAINED EARNINGS TOTAL OWNER'S EQUITY 226,300 218,000 TOTAL…
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