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14 May, 01:08

Based on the projections, Decker will have a. a financing deficit of $36 b. a financing surplus of $36 c. zero financing surplus or deficit d. a financing surplus of $255 e. a financing deficit of $255

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  1. 14 May, 02:37
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    B, A financing surplus of $36

    Explanation:

    As the question is incomplete so firstly I am going to write the question for you first and its solution

    Question: Decker Enterprises Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating liabilities. Income statement Current Projected Sales na 1,500 Costs na 1,080 Profit before tax na 420 Taxes (25%) na 105 Net income na 315 Dividends na 95 Balance sheets Current Projected Current Projected Current assets 100 115 Current liabilities 70 81 Net fixed assets 1,200 1,440 Long-term debt 300 360 Common stock 500 500 Retained earnings 430 650 Based on the projections, Decker will have

    Solution:

    We need to find total assets first

    Current assets = 115

    Net fixed assets = 1440

    Total assets = 115+1440 = 1555

    Secondly, we need to find sum of liabilities and stockholder equities to compare them with Total assets.

    Liabilities = current liabilities + long term debt

    Liabilities = 81 + 360 = 441

    Equity = Common stock + retained earnings

    Equity = 500 + 650 = 1150

    Total equity + liabilities = 1591

    Financial Deficit/Surplus = Total assets - Total liabilities and stockholder equity

    Financial Deficit/Surplus = 1555 - 1591

    Financial Deficit/Surplus = - 36 surplus
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