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Check my work Check My Work button is now enabledItem 2 Item 2 10 points Item Skipped Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Balance Sheet Sales $ 38,000 Assets $ 27,300 Debt $ 6,700 Costs 32,600 Equity 20,600 Net income $ 5,400 Total $ 27,300 Total $ 27,300 The company has predicted a sales increase of 15 percent. Assume Wims pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations.) Determine the external financing needed. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.)

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A11 1 AFN (A/SO)AS-(LUSO)AS-MS1(RR) 2 A- Assets tied directly to sales 3 L-spontaneous liabilities that are affected by sales 4 S0 the previous years sales 5 S1 total projected sales for next year 6 AS the change in sales between S0 and S1 7 MS1 projected net income 8 RR the retention ratio from net income $ 27,300 $ 38,000 $ 43,700 $ 5,700 $ 6,21043700* (5400/38000) -38000*(1+15%) 50.0% -1-50% 10 External financing needed (EFN) 990

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