Jackson Co. has the following balance sheet as of December 31 2003.
Current Assets $600000
Fixed Assets: $400000
Total assets: $1000000
Accounts payable: $100000
Notes Payable: $100000
ToT Current Liabs: $300000
Long Term Debt: $300000
ToT equity: $400000
TOT claims $1000000
In 2003 the company reported sales of $5 million net income of $100000 and dividends of $60000. The company anticipates its sales will increase 20% in
2004 and its dividend payout will remain at 60%. Assume the company is at full capacity so its assets and spontaneous liabilities will increase
proportionately with an increase in sales.
Assume the company uses the AFN formula and all additional funds needed (AFN) will come from issuing new long-term debt. Given its forecast how much long-term
debt will the company have to issue in 2004?
1. please explain(display) and solve step by step on an excel spreadsheet
2. do the new financial statements using the proforming method