RRM, Inc. has the following balance sheet: RRM, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 2,700 Accruals $ 4,800 Marketable securities 2,500 Accounts payable 17,450 Accounts receivable 17,160 Notes payable 8,000 Inventory 19,820 Long-term debt 20,000 Common stock 22,000 Plant and equipment 43,000 Retained earnings 12,930 $ 85,180 $ 85,180 Sales are currently $100,000, but management expects sales to rise to $130,000. The net profit margin is expected to be 11 percent, and the firm distributes 60 percent of its earnings as dividends.Management is concerned about the firm's need for external funding to cover the expansion in assets required by the expansion in sales. To achieve sales of $130,000, management will have to expand plant by $10,000 and expects to increase its holdings of cash by $1,000. However, the holding of marketable securities may be reduced to zero. According to the percent of sales and the additional information, will the firm need external financing, and, if so, how much? Round your answer to the nearest dollar. Enter the answer as a positive value. The firm funds of $ . Construct a pro forma balance sheet indicating the forecasted new entries for sales of $130,000. If the firm has excess funds, they should be invested in marketable securities. If the firm needs funds, these should be covered by issuing new long-term debt. If your answer is zero, enter "0". Round your answers to the nearest dollar. RRM, Incorporated Pro Forma Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Cash $ Accruals $ Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long-term debt Common stock Plant and equipment Retained earnings $ $

RRM, Inc. has the following balance sheet: RRM, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 2,700 Accruals $ 4,800 Marketable securities 2,500 Accounts payable 17,450 Accounts receivable 17,160 Notes payable 8,000 Inventory 19,820 Long-term debt 20,000 Common stock 22,000 Plant and equipment 43,000 Retained earnings 12,930 $ 85,180 $ 85,180 Sales are currently $100,000, but management expects sales to rise to $130,000. The net profit margin is expected to be 11 percent, and the firm distributes 60 percent of its earnings as dividends.Management is concerned about the firm's need for external funding to cover the expansion in assets required by the expansion in sales. To achieve sales of $130,000, management will have to expand plant by $10,000 and expects to increase its holdings of cash by $1,000. However, the holding of marketable securities may be reduced to zero. According to the percent of sales and the additional information, will the firm need external financing, and, if so, how much? Round your answer to the nearest dollar. Enter the answer as a positive value. The firm funds of $ . Construct a pro forma balance sheet indicating the forecasted new entries for sales of $130,000. If the firm has excess funds, they should be invested in marketable securities. If the firm needs funds, these should be covered by issuing new long-term debt. If your answer is zero, enter "0". Round your answers to the nearest dollar. RRM, Incorporated Pro Forma Balance Sheet as of 12/31/X1 Assets Liabilities and Equity Cash $ Accruals $ Marketable securities Accounts payable Accounts receivable Notes payable Inventory Long-term debt Common stock Plant and equipment Retained earnings $ $

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

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Question

RRM, Inc. has the following balance sheet:

RRM, Incorporated Balance Sheet as of 12/31/X0
Assets		Liabilities and Equity
Cash	$	2,700	Accruals	$	4,800
Marketable securities		2,500	Accounts payable		17,450
Accounts receivable		17,160	Notes payable		8,000
Inventory		19,820
			Long-term debt		20,000
			Common stock		22,000
Plant and equipment		43,000	Retained earnings		12,930
	$	85,180		$	85,180

Sales are currently $100,000, but management expects sales to rise to $130,000. The net profit margin is expected to be 11 percent, and the firm distributes 60 percent of its earnings as dividends.
Management is concerned about the firm's need for external funding to cover the expansion in assets required by the expansion in sales. To achieve sales of $130,000, management will have to expand plant by $10,000 and expects to increase its holdings of cash by $1,000. However, the holding of marketable securities may be reduced to zero.

According to the percent of sales and the additional information, will the firm need external financing, and, if so, how much? Round your answer to the nearest dollar. Enter the answer as a positive value.

The firm funds of $ .

Construct a pro forma balance sheet indicating the forecasted new entries for sales of $130,000. If the firm has excess funds, they should be invested in marketable securities. If the firm needs funds, these should be covered by issuing new long-term debt. If your answer is zero, enter "0". Round your answers to the nearest dollar.

RRM, Incorporated Pro Forma Balance Sheet as of 12/31/X1
Assets		Liabilities and Equity
Cash	$		Accruals	$
Marketable securities			Accounts payable
Accounts receivable			Notes payable
Inventory
			Long-term debt
			Common stock
Plant and equipment			Retained earnings
	$			$

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