Financing Deficit Stevens Textile\'s 2013 financial statements are shown below:

Question

Financing Deficit

Stevens Textile's 2013 financial statements are shown below:

Balance Sheet as of December 31, 2013 (Thousands of Dollars)

Income Statement for December 31, 2013 (Thousands of Dollars)

Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0    Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600    Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860    Total assets $29,160    Total liabilities and equity $29,160

Explanation / Answer

Additional Funds Needed = $ 823.08

Notes Payable required = $ 823.08

Forecasted Balance Sheet as of December 31, 2014 (Thousands of Dollars) Cash $ 1,188.00 Accounts payable $ 4,752.00 Receivables $ 7,128.00 Accruals $ 3,168.00 Inventories $ 9,900.00 Line of credit $ -      Total current assets $ 18,216.00 Notes payable $ 3,133.08    Total current liabilities $ 11,053.08 Net fixed assets $ 13,860.00 Mortgage bonds $ 3,500.00 Common stock $ 3,500.00 Retained earnings $ 14,022.92    Total assets $ 32,076.00    Total liabilities and equity $ 32,076.00 Note: Assets have been increased by 10%, spontaneous liabilities or current liabilities have been increased by 10% Forecasted Income Statement for 31st December 2014 (Thousands of Dollars) Particulars Amount Sales $ 39,600.00 Operating costs $ 35,684.00    Earnings before interest and taxes $ 3,916.00 Interest
(On mortgage bonds and notes payable on 1st Jan 2014) $ 392.00    Pre-tax earnings $ 3,524.00 Taxes (40%) $ 1,409.60 Net income $ 2,114.40 Dividends (45%) $ 951.48 Addition to retained earnings $ 1,162.92

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