Question

Pro forma balance sheet. Next year, National Beverage Company will increase its plant, property, and equipment by $4,038,000 with a plant expansion. The inventories will grow by 30%, accounts receivable will grow by 25%, and marketable securities will be reduced by 47% to help finance the expansion. Assume all other asset accounts will remain the same and the company will use long-term debt to finance the remaining expansion costs (no change in common stock or retained earnings). Using this information and the balance sheet in the popup window, B. 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.)

Answer 1

Answer.

Additional Debt = Total Assets - Total Liabilities and Owners' equity before New long term  debt

Additional Debt = $34,372,430.00 - $ 29,931,000 = $4,441,430. (Balancing Figure)

National Beverage Company
Pro Forma Balance Sheet for the year Ending December 31,2014
ASSETS	AMOUNT	LIABILITIES	AMOUNT
Current Assets		Current Liabilities
Cash	$24,48,000.00	Account payable	$56,72,000.00
Marketable Securities $1,606,000 - 47%	$8,51,180.00	Other Current liabilities	$32,43,000.00
Accounts receivable $2,713,000+25%	$33,91,250.00	Total Current liabilities	$89,15,000.00
Inventories $2,080,000+30%	$20,80,000.00
Total Current Assets	$87,70,430.00	Long term liabilities
Long term assets		Long term Debt $1,301,000+$4,441,430(additional debt)	$57,42,430.00
Plant property and Equipment $13,628,000+$4,038,000	$1,76,66,000.00	Other long term liabilities	$28,90,000.00
Goodwill	$14,71,000.00	Total Long term liabilities	$86,32,430.00
Intangible asset	$64,65,000.00	Total Liabilites	$1,75,47,430.00
Total long term asset	$2,56,02,000.00
		Owners' Equity
		Common stock	$68,76,000.00
		Retained Earnings	$99,49,000.00
		Total Owners' Equity	$1,68,25,000.00
TOTAL ASSETS	$3,43,72,430.00	TOTAL LIABILITIES AND OWNERS' EQUITY	$3,43,72,430.00