### Industrial Supply Company Financial Statements#### Balance Sheet (Actual as of December 31, Year 1)**Assets**- **Cash:** $500,000 - Comments: 25% increase (assumption)- **Accounts Receivable:** $2,200,000 - Comments: 25% increase (assumption)- **Inventories:** $2,800,000 - Comments: 25% increase (assumption)**Total Current Assets:** $5,500,000 - **Fixed Assets, Net:** $1,000,000 - Comments: No increase (assumption)**Total Assets (A):** $6,500,000 ---**Liabilities and Equity**- **Accounts Payable (CL):** $1,400,000 - Comments: 25% increase (assumption)- **Notes Payable:** $700,000 **Total Current Liabilities:** $2,100,000 - **Long-term Debt:** $500,000 - Comments: No change (assumption)- **Stockholders’ Equity:** $3,900,000 **Total Liabilities and Equity:** $6,500,000 ---#### Income Statement**Year 1**(No further details provided in the image regarding the income statement's specifics.) **Income Statement for Year 1:**- **Sales (S):** $14,900,000 - *Forecasted 25% increase*- **Expenses, including interest & taxes:** $14,000,000- **Earnings after taxes (EAT):** $900,000- **Dividends paid (D):** $250,000 - *No change (assumption)*- **Retained earnings:** $650,000---**Selected Financial Ratios:**- **Current ratio:** 2.62 times- **Debt ratio:** 40.00%- **Return on stockholders’ equity:** 23.08%- **Net profit margin on sales:** 6.04%---**Additional Financing Requirement for Year 2:**- **Increase in Sales:** $3,725,000- **Increase in Expenses:** $3,500,000**Assumptions:**- The company has excess fixed assets.- No increase in net fixed assets is required as sales increase.- The company plans to maintain its dividend payments at the same level in Year 2 as in Year 1.- Round answers to the nearest dollar.**[Input field]**

Particulars Amount % increase Change Cash 500000 25% 625000 Accounts Receivable 22,00,000 25%…

Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1 Comments Assets Cash 500,000 25% increase (assumption) Accounts receivable 2,200,000 25% increase (assumption) Inventories 2,800,000 25% increase (assumption) $ 5,500,000 $ 1,000,000 $ 6,500,000 Total current assets Fixed assets, net No increase (assumption) Total assets (A) Liabilities and Equity Accounts payable (CL) 1,400,000 25% increase (assumption) Notes payable 700,000 Total current liabilities 2,100,000 Long-term debt 500,000 No change (assumption) Stockholders' equity 3,900,000 Total liabilities and equity $ 6,500,000

Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1 Comments Assets Cash 500,000 25% increase (assumption) Accounts receivable 2,200,000 25% increase (assumption) Inventories 2,800,000 25% increase (assumption) $ 5,500,000 $ 1,000,000 $ 6,500,000 Total current assets Fixed assets, net No increase (assumption) Total assets (A) Liabilities and Equity Accounts payable (CL) 1,400,000 25% increase (assumption) Notes payable 700,000 Total current liabilities 2,100,000 Long-term debt 500,000 No change (assumption) Stockholders' equity 3,900,000 Total liabilities and equity $ 6,500,000

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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