Please see the attached Questions. The balance sheet and Income statement to fol

Question

Please see the attached Questions. The balance sheet and Income statement to follow

payable reported on the 2011 forecasted balance sheets? (Hint: You don't need to forecast the income statements because you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2011 addition to retained earnings for the balance sheet.) Stevens Textile's 2010 financial statements arc shown below: Balance Sheet as of December 31. 2010 (Thousands of Dollars) Income Statement for December 31. 2010 (Thousands of Dollars) Suppose 2011 sales are projected to increase by 15% over 2010 sales. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2011. The interest rate on all debt is 10%, and cash earns no interest income. Assume that all additional debt is added at the end of the year, which means that yon should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2010, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales Determine the additional funds needed. What is the resulting total forecasted amount of notes payable? In your answers to Parts a and b, you should not have charged any interest on the additional debt added during 2011 because it was assumed that the new debt was added at the end of the year. But now suppose that the new debt is added throughout the year. Don't do any calculations, but how would this change the answers to parts a and b?

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