Jackson Co. has the following balance sheet as of December 31, 2020. Current assets P600,000 Fixed assets 400,000 Total assets P1,000,000 Accounts payable P100,000 Accrued liabilities 100,000 Notes payable 100,000 Long-term debt 300,000 Total common equity 400,000 Total liabilities and equity P1,000,000 In 2020, the company reported sales of P5 million, net income of P100,000, and dividends of P60,000. The company anticipates its sales will increase 20 percent in 2021 and its dividend payout will remain at 60 percent. Assume the company is at full capacity, so its assets and
Jackson Co. has the following
|
Current assets |
P600,000 |
|
Fixed assets |
400,000 |
|
Total assets |
P1,000,000 |
|
|
|
|
Accounts payable |
P100,000 |
|
Accrued liabilities |
100,000 |
|
Notes payable |
100,000 |
|
Long-term debt |
300,000 |
|
Total common equity |
400,000 |
|
Total liabilities and equity |
P1,000,000 |
In 2020, the company reported sales of P5 million, net income of P100,000, and dividends of P60,000. The company anticipates its sales will increase 20 percent in 2021 and its dividend payout will remain at 60 percent. Assume the company is at full capacity, so its assets and spontaneous liabilities will increase proportionately with an increase in sales. Assume the company uses the AFN formula and all additional funds needed (AFN) will come from issuing new long-term debt. Given its
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