Problem 12-8 Financing Deficit Stevens Textile\'s 2013 financial statements are
ID: 2629951 • Letter: P
Question
Problem 12-8
Financing Deficit
Stevens Textile's 2013 financial statements are shown below:
Balance Sheet as of December 31, 2013 (Thousands of Dollars)
Income Statement for December 31, 2013 (Thousands of Dollars)
How did you calculate the answers you got the first time? Can you provide calcualtions so I can learn please? Thank you.
Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160Explanation / Answer
Hi
Please see answers below
1. Stevens Textiles Pro Forma Income Statement December 31, 2014
2006
Forecast Basis
2007
Sales
36000
1.15 x Sales
41,400
Operating Costs
32,440
.9011 x sales (07)
37,306
EBIT
3,560
4,094
Interest
460
.1 x Debt (06)
560
EBT
3,100
35,34
Taxes (40%)
1,249
1,414
Net Income
1,860
2,120
Dividends
837
954
Addition to RE
1,023
1,166
Stevens Textiles Pro Forma Balance Sheet
December 31, 2014 (Thousands of Dollars)
Forecast Basis %
Pro Forma after
2006
2007 Sales
Additions
Pro Forma
Financing
Financing
Cash
10,800
.0300
1,242
1242
Acc. Rec.
6480
.1883
7452
7452
Inventories
9000
.2005
10350
10350
Total Curr. Assets
16560
19044
19044
Fixed Assets
12600
.3500
14490
14490
Total Assets
29160
33534
33534
Acc. Payable
4320
.1200
4968
4968
Accruals
2880
.0800
3312
3312
Notes Payable
2100
2100
+2128
4228
Total Curr. Liablities
9300
10380
12508
Long-term debt
3500
3500
3500
Total Debt
12800
13880
16008
Common Stock
3500
3500
3500
Retained Earnings
12860
1.166*
14026
14026
Total Liablities and Eq.
29160
31406
33534
AFN = 2128
2. Notes payable: $4228
2006
Forecast Basis
2007
Sales
36000
1.15 x Sales
41,400
Operating Costs
32,440
.9011 x sales (07)
37,306
EBIT
3,560
4,094
Interest
460
.1 x Debt (06)
560
EBT
3,100
35,34
Taxes (40%)
1,249
1,414
Net Income
1,860
2,120
Dividends
837
954
Addition to RE
1,023
1,166