Question

 Harrison​ Electronics, Inc. operates a chain of electrical lighting and fixture distribution centers throughout northern Arizona. The firm is anticipating expansion of its sales in the coming year as a result of recent population growth trends. The​ firm's financial analyst has prepared pro forma balance sheets that reflect three different rates of growth in firm sales for the coming year and the corresponding​ non-discretionary sources of financing the firm expects to have​ available, as​ follows:

Harrison​ Electronics, Inc.
Pro Forma Balance Sheet for 2014		Alternative Growth Rates
	Calculation	10​%		20​%		40​%
Current assets		​$13,200,000		​$14,400,000		​$16,800,000
Net fixed assets		​$19,800,000		​$21,600,000		​$25,200,000
Total		​$33,000,000		​$36,000,000		​$42,000,000
Accounts payable		​$2,200,000		​$2,400,000		​$2,800,000
Accrued expenses		2,200,000		2,400,000		2,800,000
Notes payable	No change	1,500,000		1,500,000		1,500,000
Current liabilities		5,900,000		​6,300,000		​$7,100,000
​Long-term debt	No change	6,500,000		6,500,000		6,500,000
Total liabilities		​$12,400,000		​$12,800,000		​$13,600,000
Common stock​ (par)	No change	​$1,000,000		​$1,000,000		​$1,000,000
​Paid-in capital	No change	2,000,000		2,000,000		2,000,000
Retained earnings		15,550,000		15,600,000		15,700,000
Common equity		​$18,550,000		​$18,600,000		​$18,700,000
Projected sources of financing		​$30,950,000		​$31,400,000		​$32,300,000
Discretionary financing needs
Total financing needs equals Total assetsTotal financing needs=Total assets

Answer 1

Discretionary Financing Needs = (Proforma Total Assets - Accounts Payable-           Accrued Expenses- Notes Payable-Long Term Debt-Common Equity)
Particulars		10%	20%	40%
Total Assets		3,30,00,000	3,60,00,000	4,20,00,000
Less:-
Accounts Payable		22,00,000	24,00,000	28,00,000
Accrued Expenses		2,20,000	2,40,000	2,80,000
Notes Payable		15,00,000	15,00,000	15,00,000
Long Term Debt		65,00,000	65,00,000	65,00,000
Common Equity		10,00,000	10,00,000	10,00,000
Discretionary Financing Needs		2,15,80,000	2,43,60,000	2,99,20,000

(b) Notes Payable, Long term Debt, Common Stock, and Paid-in Capital stays consistent at all degrees of the development. The Discretionary Financing Needs of the firm can be met by expanding the Accounts payable, Accrued Expenses. The Profits earned by the firm can be moved to the Retained Earnings Account. This will assist the firm with meeting its monetary needs. A firm can likewise choose any transient credits from the bank, so as to fulfill its money related necessities. In this way, expanding the records payable with the expansion in held profit the budgetary need of the firm can be met. What's more firm can likewise decide on momentary advances from banks.