Question

Pro forma balance sheet. Next year, National Beverage Company will increase its plant, property, and equipment by $4,058,000 with a plant expansion. The inventories will grow by 31%, accounts receivable will grow by 21%, and marketable securities will be reduced by 53% to help finance the expansion. Assume all other asset accounts will remain the same and the company will use long-term debt finance the remaining expansion costs (no change in common stock or retained earnings). Using this information and the balance sheet in the popup window, for National Beverage Company for 2013, prepare a pro forma balance sheet for 2014. How much additional debt will the company need using this pro forma balance sheet? Complete the pro-forma balance sheet for 2014 below: (Round to the nearest dollar.) - X Data Table National Beverage Company Pro Forma Balance Sheet for the Year Ending December 31, 2014 ASSETS LIABILITIES National Beverage Company Current assets Current liabilities Balance Sheet for the Year Ending December 31, 2013 Cash Accounts payable $ ASSETS LIABILITIES Marketable securities $ Other current liabilities $ Current assets Current liabilities Accounts receivable Total current liabilities $ Cash S 2,474,000 Accounts payable S 5,604,000 Inventories Long-term liabilities Marketable securities $ 1,617,000 Other current liabilities $ 3,299,000 Total current assets $ Long-term debt $ Accounts receivable S 2,746,000 Total current liabilities $ 8,903,000 Long-term assets Other long-term liabilities $ Inventories $ 1,667,000 Long-term liabilities Plant, property, and equipment Total long-term liabilities $ Total current assets $ 8,504,000 Long-term debt $ 1,352,000 Goodwill $ Total liabilities $ Long-term assets Other long-term liabilities $ 2,856,000 Intangible assets $ OWNERS' EQUITY Plant, property, and equipment $ 13,657,000 Total long-term liabilities S 4,208,000 Total long-term assets Common stock Goodwill S 1,406,000 liabilities S 13,111,00 Retained earnings $ Intangible assets $ 6,413,000 OWNERS' EQUITY Total owners' equity $ Total long-term assets $ 21,476,000 Common stock $ 6.892,000 TOTAL LIABILITIES AND Retained earnings S 9,977,000 TOTAL ASSETS OWNERS' EQUITY $ Total owners' equity $ 16,869,000 TOTAL LIABILITIES AND TOTAL ASSETS S 29,980,000 OWNERS' EQUITY S 29,980,000 $ $ Print Done

Answer 1

Assets

A) Current Assets

1) No change in cash account is mentioned hence it will be same as year 2013

Cash = 2474000

2) Marketable securities = (1 - 53%) * securities value of 2013 = (1 - 0.53) * 1617000 therefore

Marketable securities = 759990

3) accounts receivable = (1 + 21%) * Accounts receivable of 2013 = 1.21 * 2746000

Accounts receivable = 3322660

4) inventories = (1 + 31%) * inventories of 2013 = 1.31 * 1667000

inventories = 2183770

5) Total current assets = 2474000 + 759990 + 3322660 + 2183770 = 8740420

Total current assets = 8740420

B) long term assets

1) Plant, property and equipment = 4058000 + plant, property and equipment of 2013

= 4058000 + 13657000

Plant, property and equipment = 17715000

2) goodwill and intangible assets will remain same therefore

goodwill = 1406000

intangible assets = 6413000

3) total long term assets = 17715000 + 1406000 + 6413000 = 25534000

C) total assets = 8740420 + 25534000 = therefore

total assets =  34274420

additional debt = total assets 2014 - total assets 2013

= 34274420 - 2998000

additional debt =4294420

Liabilities

OWNERS EQUITY

1) common stock , retained earnings and therefore total owners equity will remain same as in 2013

common stock = 6892000

retained earnings = 9977000

total owners equity = 16869000

Liabilities

1) all current liabilities will remain same therefore

Accounts payable = 5604000

other current liabilities = 3299000

total current liabilities = 8903000

2) other long term liabilities will remain same as in year 2013 therefore

other long term liabilities = 2856000

3) long term debt = long term debt of year 2013 + additional debt = 1352000 + 4294420 therefore

long term debt = 5646420

total long term liabilities = 2856000 +  5646420 therefore

total long term liabilities = 8502420

4) total liabilities = 8903000 + 8502420 therefore

total liabilities = 17405420

5) Total liabilities and owners equity = 16869000 + 17405420

total liabilities and owners equity = 34274420