Question

Problem 3-21 Calculating EFN The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2012 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. MOOSE TOURS, INC. 2011 Income Statement Sales Costs Other expenses $ 748.000 583.000 19.000 Earnings before interest and taxes Interest expense $ 146.000 10,000 Taxable income Taxes 35% $136.000 47,600 Net income S 88.400 Dividends Addition to retained earnings $17.680 70.720 MOOSE TOURS, INC. Balance Sheet as of December 31, 2011 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 20,740 Accounts payable $ 54,900 Accounts receivable 33,060 Notes payable 14,100 Inventory 70,020 Total $ 69,000 Total $ 123,820 Long-term debt $ 100.000 Fixed assets Owners' equity Net plant and equipment $400,000 Common stock and paid-in surplus $ 100.000 Retained earnings 254,820 Total $ 354,820 $523,820 Total assets $ 523,820 Total liabilities and owners' equity If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 30 percent growth rate in sales? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. (e.g., 32)) External financing needed

Answer 1

E15 X V AMOUNT -Nm + : A B Income Statement Sales $ Less: Costs $ 4 Less: Other expenses $ 5 EBIT $ 6 Less: Interest $ 7 EBT $ 8 Less: Tax @ 35% $ 9 Net income $ 10 Less: Dividends $ 11 Retained Earnings $ $ 71,370 $ 14,100 fx =F13-H13 C D E ASSETS 972,400 CURRENT ASSETS: 757,900 Cash 24,700 Account Receivable 189,800 Inventory 10,000 179,800 Total 62,930 FIXED ASSETS: 116,870 Net plant and equipment 23,374 93,496 F AMOUNT LIABILITIES & SHAREHOLDER'S EQUITY LIABILITIES: $ 26,962 Account Payable $ 42,978 Notes Payable $ 91,026 Total $ 160,966 Long Term Debt $ 85,470 $ 100,000 $ 520,000 SHAREHOLDER'S EQUITY Common Shareholder's Equity Accumulated Retained Earnings Total | $ 680,966 (TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY $ 100,000 $ 348,316 $ 448,316 $ 633,786 | TOTAL OF ASSETS External financing is neede

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