1. Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 million...

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1. Carlsbad Corporation's sales are expected to increase from $5million in 2016 to $6 million in 2017, or by 20%. Its assetstotaled $6 million at the end of 2016. Carlsbad is at fullcapacity, so its assets must grow in proportion to projected sales.At the end of 2016, current liabilities are $1 million, consistingof $250,000 of accounts payable, $500,000 of notes payable, and$250,000 of accrued liabilities. Its profit margin is forecasted tobe 6%, and the forecasted retention ratio is 35%. Use the AFNequation to forecast Carlsbad's additional funds needed for thecoming year. Write out your answer completely. For example, 5million should be entered as 5,000,000. Round your answer to thenearest cent.
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2.
Carlsbad Corporation's sales are expected to increase from $5million in 2016 to $6 million in 2017, or by 20%. Its assetstotaled $4 million at the end of 2016. Carlsbad is at fullcapacity, so its assets must grow in proportion to projected sales.At the end of 2016, current liabilities are $1 million, consistingof $250,000 of accounts payable, $500,000 of notes payable, and$250,000 of accrued liabilities. Its profit margin is forecasted tobe 3%, and the forecasted retention ratio is 40%. Use the AFNequation to forecast the additional funds Carlsbad will need forthe coming year. Write out your answer completely. For example, 5million should be entered as 5,000,000. Round your answer to thenearest cent.
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Solution to QUESTION1 Expected Next Year Sales 6000000 After Tax profit Margin After Tax profit Margin Expected Next Year Sales x Profit Margin 6000000 x 6 360000 Additions to Retained Earnings Additions to Retained Earnings After Tax profit Margin x Retention Ratio 360000 x 35 126000 Increase in Total Assets Increase in Total See Answer

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1. Carlsbad Corporation's sales are expected to increase from $5million in 2016 to $6 million in 2017, or by 20%. Its assetstotaled $6 million at the end of 2016. Carlsbad is at fullcapacity, so its assets must grow in proportion to projected sales.At the end of 2016, current liabilities are $1 million, consistingof $250,000 of accounts payable, $500,000 of notes payable, and$250,000 of accrued liabilities. Its profit margin is forecasted tobe 6%, and the forecasted retention ratio is 35%. Use the AFNequation to forecast Carlsbad's additional funds needed for thecoming year. Write out your answer completely. For example, 5million should be entered as 5,000,000. Round your answer to thenearest cent.$2.Carlsbad Corporation's sales are expected to increase from $5million in 2016 to $6 million in 2017, or by 20%. Its assetstotaled $4 million at the end of 2016. Carlsbad is at fullcapacity, so its assets must grow in proportion to projected sales.At the end of 2016, current liabilities are $1 million, consistingof $250,000 of accounts payable, $500,000 of notes payable, and$250,000 of accrued liabilities. Its profit margin is forecasted tobe 3%, and the forecasted retention ratio is 40%. Use the AFNequation to forecast the additional funds Carlsbad will need forthe coming year. Write out your answer completely. For example, 5million should be entered as 5,000,000. Round your answer to thenearest cent.$