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August 30, 2015

Homework Help: Accounting

Posted by Johniece McCoy on Friday, August 10, 2012 at 2:37pm.

Hello I am not angry with you at all, however is there any way possible that you can help me with these two problems and we can call it even? Just let me know I am not trying to get over, however my computer had crashed and I am behind in class I purchased me a new laptop a few days ago and I am just getting back on track, please let me know?



1. Consider the Industrial Supply Company example (Table 4.4) again. Assume that the company plans to maintain its dividend payments at the same level in 2011 as in 2010. Also assume that all of the additional financing needed is in the form of short-term notes payable. Determine the amount of additional financing needed and pro forma financial statements (that is, balance sheet, income statement, and selected financial ratios) for 2011 under each of the following conditions.

Increase in Sales Increase in Expenses

a. $3,750,000 $3,750,000

b. $3,000,000 $2,800,000

c. $4,500,000 $4,000,000



2. In the Industrial Supply Company example (Table 4.4) it was assumed that the company's fixed assets were being used at nearly full capacity and that net fixed assets would have to increase proportionately as sales increased. Alternatively, suppose that the company has excess fixed assets and that no increase in net fixed assets is required as sales are increased. Assume that the company plans to maintain its dividend payments at the same level in 2011 as in 2010. Determine the amount of additional financing needed for 2011 under each of the following conditions.



Increase in Sales Increase in Expenses

a. $3,750,000 $3,750,000

b. $3,000,000 $2,800,000

c. $4,500,000 $4,000,000

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