Question

1.Broussard Skateboard's sales are expected to increase by 20% from $8.6 million in 2019 to $10.32 million in 2020. Its assets totaled $3 million at the end of 2019.

Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 70%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

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2.Berman & Jaccor Corporation's current sales and partial balance sheet are shown below.

This year

Sales                $          1,000  

Balance Sheet: Assets                                    

Cash                $          200     

Short-term investments                     $          135     

Accounts receivable               $          100     

Inventories                  $          200     

    Total current assets            $          635     

Net fixed assets                      $          450     

    Total assets             $          1,085  

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

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

This year

Sales               $          10,000

Balance Sheet: Liabilities                                           

Accounts payable                   $          2,000  

Notes payable             $          2,500  

Accruals                      $          1,400  

    Total current liabilities                    $          5,900  

Long-term bonds                    $          2,000  

    Total liabilities                     $          7,900  

Common stock                        $          1,500  

Retained earnings                   $          2,000  

    Total common equity                      $          3,500  

Total liabilities & equity                    $          11,400

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.

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Answer 1

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