Question

Next​ year, National Beverage Company will increase its​ plant, property, and equipment by $ 4 comma 060 comma 000 with a plant expansion. The inventories will grow by 32 %​, accounts receivable will grow by 25 %​, and marketable securities will be reduced by 53 % to help finance the expansion. Assume all other asset accounts will remain the same and the company will use​ long-term debt to finance the remaining expansion costs​ (no change in common stock or retained​ earnings). Using this information and the balance sheet in the popup​ window, LOADING...​, for National Beverage Company for​ 2013, prepare a pro forma balance sheet for 2014. How much additional debt will the company need using this pro forma balance​ sheet?

National Beverage Company
Balance Sheet for the Year Ending December 31, 2013
ASSETS			LIABILITIES
Current assets			Current liabilities
Cash	$	2,494,000	Accounts payable	$	5,690,000
Marketable securities	$	1,646,000	Other current liabilities	$	3,249,000
Accounts receivable	$	2,751,000	Total current liabilities	$	8,939,000
Inventories	$	1,639,000	Long-term liabilities
Total current assets	$	8,530,000	Long-term debt	$	1,365,000
Long-term assets			Other long-term liabilities	$	2,871,000
Plant, property, and equipment	$	13,637,000	Total long-term liabilities	$	4,236,000
Goodwill	$	1,401,000	Total liabilities	$	13,175,000
Intangible assets	$	6,448,000	OWNERS' EQUITY
Total long-term assets	$	21,486,000	Common stock	$	6,865,000
			Retained earnings	$	9,976,000
			Total owners' equity	$	16,841,000
TOTAL ASSETS	$	30,016,000	TOTAL LIABILITIES AND OWNERS' EQUITY	$	30,016,000

How much additional debt will be estimated using this pro forma balance​ sheet? ​(Round to the nearest​ dollar.)

$

Answer 1

We can calculate the desired result as follows:

Formulas used in the excel sheet are :

Additional Debt required comes out to be $ 4,399,850

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