Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31,...

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Financing Deficit Garlington Technologies Inc.s 2019 financial statements are shown below: Income Statement for December 31, Dividends: $ $ 214000 438500 Addition to RE: to Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Ca

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Answer 1

Answer #1

Cash	192000
Receivables	432000
Inventories	864000
Total current assets	1488000
Fixed assets	4800000
Total assets	6288000

Accounts payable	432000
Line of credit	497500
Accruals	240000
Total current liabilities	1169500
LT Bonds	1000000
Common stock	1100000
Retained earnings	3018500
Total L&E	6288000

Workings
Retained earnings = Last year retained earnings + (net income - dividend)
Retained earnings = 2580000+438500 = 3018500

Total L&E = Total assets = 6288000

Line of credit = 6288000-432000-240000-1000000-1100000-3018500 = 497500

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Answer 2

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