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Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Current Assets: Cash and equivalents Accounts receivable Liabilities Current Liabilities: $150,000 Accounts payable $250,000 400,000 Accrued liabilities 150,000 Inventories 350,000 Notes payable 100,000 Total Current Assets $900,000 Total Current Liabilities $500,000 Net Fixed Assets: Long-Term Bonds 1,000,000 Net plant and equipment(cost minus depreciation) $2,100,000 Total Debt $1,500,000 Common Equity Common stock 800,000 Retained earnings 700,000 Total Common Equity Total Assets $3,000,000 Total Liabilities and Equity $1,500,000 $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Blue Elk Manufacturing generated $500,000 net income on sales of $14,500,000. The firm expects sales to increase by 17% this coming year and also expects to maintain its long-run dividend payout ratio of 30%. Suppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support Blue Elk Manufacturing's expected sales. $612,000 $586,500 $535,500 $510,000

Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Current Assets: Cash and equivalents Accounts receivable Liabilities Current Liabilities: $150,000 Accounts payable $250,000 400,000 Accrued liabilities 150,000 Inventories 350,000 Notes payable 100,000 Total Current Assets $900,000 Total Current Liabilities $500,000 Net Fixed Assets: Long-Term Bonds 1,000,000 Net plant and equipment(cost minus depreciation) $2,100,000 Total Debt $1,500,000 Common Equity Common stock 800,000 Retained earnings 700,000 Total Common Equity Total Assets $3,000,000 Total Liabilities and Equity $1,500,000 $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Blue Elk Manufacturing generated $500,000 net income on sales of $14,500,000. The firm expects sales to increase by 17% this coming year and also expects to maintain its long-run dividend payout ratio of 30%. Suppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support Blue Elk Manufacturing's expected sales. $612,000 $586,500 $535,500 $510,000

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 80E: Asset Efficiency Ratios Refer to financial statements in Exercise 12-76 and the information below....
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Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Current Assets: Cash and equivalents Accounts receivable Liabilities Current Liabilities: $150,000 Accounts payable $250,000 400,000 Accrued liabilities 150,000 Inventories 350,000 Notes payable 100,000 Total Current Assets $900,000 Total Current Liabilities $500,000 Net Fixed Assets: Long-Term Bonds 1,000,000 Net plant and equipment(cost minus depreciation) $2,100,000 Total Debt $1,500,000 Common Equity Common stock 800,000 Retained earnings 700,000 Total Common Equity Total Assets $3,000,000 Total Liabilities and Equity $1,500,000 $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Blue Elk Manufacturing generated $500,000 net income on sales of $14,500,000. The firm expects sales to increase by 17% this coming year and also expects to maintain its long-run dividend payout ratio of 30%. Suppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support Blue Elk Manufacturing's expected sales. $612,000 $586,500 $535,500 $510,000
Transcribed Image Text:Blue Elk Manufacturing Balance Sheet For the Year Ended on December 31 Assets Current Assets: Cash and equivalents Accounts receivable Liabilities Current Liabilities: $150,000 Accounts payable $250,000 400,000 Accrued liabilities 150,000 Inventories 350,000 Notes payable 100,000 Total Current Assets $900,000 Total Current Liabilities $500,000 Net Fixed Assets: Long-Term Bonds 1,000,000 Net plant and equipment(cost minus depreciation) $2,100,000 Total Debt $1,500,000 Common Equity Common stock 800,000 Retained earnings 700,000 Total Common Equity Total Assets $3,000,000 Total Liabilities and Equity $1,500,000 $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Blue Elk Manufacturing generated $500,000 net income on sales of $14,500,000. The firm expects sales to increase by 17% this coming year and also expects to maintain its long-run dividend payout ratio of 30%. Suppose Blue Elk Manufacturing's assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support Blue Elk Manufacturing's expected sales. $612,000 $586,500 $535,500 $510,000
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