Projected Spontaneous LiabilitiesSmiley Corporation's current sales and partial balance sheet are shown below. This yearSales $10,000 Balance Sheet: Liabilities Accounts payable $1,000 Notes payable $3,000 Accruals $1,800 Total current liabilities $5,800 Long-term bonds $2,000 Total liabilities $7,800 Common stock $2,000 Retained earnings $2,500 Total common equity $4,500 Total liabilities & equity $12,300 Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? Do not round intermediate calculations. Round your answer to the nearest dollar.

Spontaneous Liabilities are those liabilities which are affected due to day to day operations these…

Answered: Sales are expected to grow by 10% next…

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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Projected Spontaneous Liabilities

Smiley Corporation's current sales and partial balance sheet are shown below.

	This year
Sales		$	10,000
Balance Sheet: Liabilities
Accounts payable		$	1,000
Notes payable		$	3,000
Accruals		$	1,800
Total current liabilities		$	5,800
Long-term bonds		$	2,000
Total liabilities		$	7,800
Common stock		$	2,000
Retained earnings		$	2,500
Total common equity		$	4,500
Total liabilities & equity		$	12,300

Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? Do not round intermediate calculations. Round your answer to the nearest dollar.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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