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Projected Spontaneous Liabilities Smiley Corporation's current sales and partial balance sheet are shown below. This year...

Projected Spontaneous Liabilities

Smiley Corporation's current sales and partial balance sheet are shown below.

This year
Sales $ 10,000
Balance Sheet: Liabilities
Accounts payable $ 1,500
Notes payable $ 2,500
Accruals $ 1,800
    Total current liabilities $ 5,800
Long-term bonds $ 2,000
    Total liabilities $ 7,800
Common stock $ 2,000
Retained earnings $ 2,500
    Total common equity $ 4,500
  Total liabilities & equity $ 12,300

Sales are expected to grow by 12% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? Do not round intermediate calculations. Round your answer to the nearest dollar.

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Answer #1

Current Spontaneous Liabilities = Accounts Payable + Accruals = $1,500 + $1,800 = $3,300

Projected Spontaneous Liabilities = Current Spontaneous Liabilities * (1 + g)

= $3,300 * (1 + 0.12) = $3,696

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