Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts payable Accounts receivable Accrued liabilities Inventories: Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Assets, $150,000 400,000 350,000 $900,000 $2,100,000 $3,000,000 Notes payable D Total Current Liabilities Long-Term Bonds Total Debt Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 800,000 700,000 $1,500,000 $3,000,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet:
Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year Ended on December 31
Assets
Liabilities
Current Assets:
Current Liabilities:
Cash and equivalents
Accounts payable
Accounts receivable
Accrued liabilities
Inventories
Total Current Assets
Net Fixed Assets:
Net plant and equipment
(cost minus depreciation)
Total Assets
$150,000
400,000
350,000
$900,000
$2,100,000
$3,000,000
Notes payable
Total Current Liabilities
Long-Term Bonds
Total Debt
Common Equity
Common stock
Retained earnings
Total Common Equity
Total Liabilities and Equity
$250,000
150,000
100,000
$500,000
1,000,000
$1,500,000
800,000
700,000
$1,500,000
$3,000,000
Transcribed Image Text:Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts payable Accounts receivable Accrued liabilities Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Assets $150,000 400,000 350,000 $900,000 $2,100,000 $3,000,000 Notes payable Total Current Liabilities Long-Term Bonds Total Debt Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 800,000 700,000 $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,
Green Caterpillar Garden Supplies Inc. generated $500,000 net income on sales of $14,000,000. The firm expects sales to increase by 18% this
coming year and also expects to maintain its long-run dividend payout ratio of 45%.
Suppose Green Caterpillar Garden Supplies Inc.'s assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in
total assets that is necessary to support Green Caterpillar Garden Supplies Inc.'s expected sales. (Note: Do not round intermediate calculations.)
O $621,000
O $432,000
O $540,000
O $459,000
Transcribed Image Text: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, Green Caterpillar Garden Supplies Inc. generated $500,000 net income on sales of $14,000,000. The firm expects sales to increase by 18% this coming year and also expects to maintain its long-run dividend payout ratio of 45%. Suppose Green Caterpillar Garden Supplies Inc.'s assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support Green Caterpillar Garden Supplies Inc.'s expected sales. (Note: Do not round intermediate calculations.) O $621,000 O $432,000 O $540,000 O $459,000
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