Question

The most recent financial statements for Fleury Inc., follow Sales for 2015 are projected to grow by 25 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 FLEURY, INC 2014 Income Statement Sales Costs Other expenses $754,000 589,000 10,000 Eamings before interest and taxes $155,000 11,000 Interest paid Taxable income $144,000 43,200 Taxes (30%) Net income Dividends $100,800 $20,160 80,640 Addition to retained earnings FLEURY, INC. Balance Sheet as of December 31, 2014 Assets Liabilities and Owners' Equity Current assets Current liabilities 55,500 Cash Accounts receivable S 21,340 Accounts payable 14,700 $ 70,200 $137,000 Net plant and equipment 430,000 Common stock and paid-in surplus $123,000 33,660 Notes payable Inventory 70,620 Total $125,620 Long-term debt Total Fixed assets Owners equity Retained earnings 225,420

Answer 1

Considering 25% Growth in sales

Income Statement 2015
Sales	$                   942,500.00
Costs	$                   736,250.00
Other Expenses	$                      12,500.00
Earning Befor Interest & taxes	$                   193,750.00
Interest Paid	$                      11,000.00
Taxable Income	$                   182,750.00
Taxes (30%)	$                      54,825.00
Net Income	$                   127,925.00
Dividends( 20% of Net income)	$                      25,585.00
Addition to retained Earning	$                   102,340.00

Balance Sheet 2015
Assets		Liabilities
Current Assets		Current Liabilities
Cash	$                      26,675.00	Account Payable	$                       69,375.00
Account Receivables	$                      42,075.00	Notes Payable	$                       18,375.00
Inventory	$                      88,275.00	Total	$                       87,750.00
Total	$                   157,025.00
		Long Term Debt	$                    137,000.00
Fixed Assets		Owners Equity
Net Plant & Equipments	$                   537,500.00	Common Stock & Paid-Up In surplus	$                    123,000.00
		Retained Earning	$                    327,760.00
Total Assets	$                   694,525.00	Total	$                    450,760.00
		External Finance	$                       19,015.00
		Total Liabilities & Equity of promoter	$                    694,525.00

External Finance = Total Assets - Current Liabilities - Long Term Debt - Owners Equity - Retained Earning

= 694,525 - 87,750 - 137,000 - 123,000 - 327,760

= $ 19,015