Question

Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes):

Income Statement				Balance Sheet
Sales	$	46,100		Assets	$	24,300		Debt	$	6,300
Costs		39,630						Equity		18,000
Net income	$	6,470		Total	$	24,300		Total	$	24,300

The company has predicted a sales increase of 10 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.

Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.)

What is the external financing needed? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)

Answer 1