Use the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: Lambrechts Specialty Shops, Inc. Balance Sheet as of December 31, 20X3 Cash $1,000,000 Accounts Payable $3,000,000 Accounts Receivable 1,500,000 Notes Payable 3,000,000 Inventories 6,000,000 Long-Term Debt 2,000,000 Net Fixed Assets 3,000,000 Stockholders’ Equity 3,500,00 Total Assets $11,500,000 Total Liabilities and Equity $11,500,000
Use the percentage of sales
Lambrechts Specialty Shops, Inc.
Balance Sheet as of December 31, 20X3
Cash $1,000,000 Accounts Payable $3,000,000
Inventories 6,000,000 Long-Term Debt 2,000,000
Net Fixed Assets 3,000,000
Total Assets $11,500,000 Total Liabilities and Equity $11,500,000
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