Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet at year-end is similar inpercent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly withsales. Assume the firm is already using capital assets at full capacity.CashAccounts receivable.InventoryCurrent assetsCapital assetsAssetsTotal assets$915103434$68Balance Sheet(in $ millions)Liabilities and Shareholders' EquityAccounts payableAccrued vagesAccrued taxesCurrent liabilities.Long-term debtCommon stockRetained earningsTotal liabilities and shareholders' equity$98724101519$68The firm has an aftertax profit margin of 8 percent and a dividend payout ratio of 40 percent.a. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Do notround intermediate calculations. Enter the answer in millions. Round the final answer to 3 decimal places.)The firm needs $million in external funds. b. Prepare a pro forma balance sheet with any financing adjustment made to long-term debt. (Do not round intermediatecalculations. Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity. Enter theanswers in millions. Round the final answers to 2 decimal places.)(Click to select)(Click to select)(Click to select)Current assets.(Click to select)Total assetsAssets$Current ratioTotal debt / assets$Balance Sheet(5 millions)Year 1Liabilities and Shareholders' Equity(Click to select)(Click to select)(Click to select)Current liabilities(Click to select)(Click to select)(Click to select)Total liabilities and shareholders' equityc. Calculate the current ratio and total debt to assets ratio for each year. (Do not round intermediate calculations. Round the finalanswers to 1 decimal places.)Year 2$$

Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet at year-end is similam percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly wit sales. Assume the firm is already using capital assets at full capacity. Assets Cash Accounts receivable. Inventory Current assets Capital assets Total assets $9 15 10 34 34 $68 Balance Sheet (in $ millions) Liabilities and Shareholders' Equity Accounts payable Accrued vages Accrued taxes Current liabilities Long-term debt Common stock Retained earnings Total liabilities and shareholders' equity $9 ******||| 8 7 24 10 15 19 $68 The firm has an aftertax profit margin of 8 percent and a dividend payout ratio of 40 percent. a. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Do not round intermediate calculations. Enter the answer in willie

Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet at year-end is similam percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly wit sales. Assume the firm is already using capital assets at full capacity. Assets Cash Accounts receivable. Inventory Current assets Capital assets Total assets $9 15 10 34 34 $68 Balance Sheet (in $ millions) Liabilities and Shareholders' Equity Accounts payable Accrued vages Accrued taxes Current liabilities Long-term debt Common stock Retained earnings Total liabilities and shareholders' equity $9 ******||| 8 7 24 10 15 19 $68 The firm has an aftertax profit margin of 8 percent and a dividend payout ratio of 40 percent. a. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Do not round intermediate calculations. Enter the answer in willie

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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