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14-6) Following are financial statements for the Genatron Manufacturing corporation for 2012 and 2011.
GENATRON MANUFACTURING CORPORATION
Balance Sheet 2012 2011
Assets
Cash $40,000 $50,000
Accts. Receivable 260,000 20,000
Inventory 500,000 450,000
Total current assets 800,000 700,000
Fixed assets, net 400,000 300,000
Total assets $1,200,000 $1,000,000
LIABILITIES AND EQUITY 2012 2011
Accts. Payable $170,000 130,000
Bank Loans 90,000 90,000
Accruals 70,000 50,000
Total current liabilities 330,000 270,000
Long-term debt, 12% 400,000 300,000
Common stock, $10 par 300,000 300,000
Capital surplus 50,000 50,000
Retained earnings 120,000 80,000
Total liabilities & equity $1,200,000 $1,000,000
INCOME STATEMENT 2012 2011
Net sales $1,500,000 $1,300,000
Cost of goods 900,000 780,000
Gross Profit 600,000 520,000
Expenses: general and admin 150,000 150,000
Marketing 150,000 130,000
Depreciation 53,000 40,000
Interest 57,000 45,000
Earnings before taxes 190,000 155,000
Income taxes 76,000 62,000
Net income $114,000 $93,000
14-7) This problem uses the financial statements for the Genatron Manufacturing corporation for the years 2012 and 2011 from Problem 6.
14-8) Genatron manufacturing expects its sales to increase by 10 % in 2013. Estimate the firm’s external financing needs by using the percent-of-sales method for the 2012 data.
