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Next year, UMPI Corporation is increasing its fixed assets, Plant, Property, and Equipment, by ...

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Accounting

Next year, UMPI Corporation is increasing its fixed assets, Plant, Property, and Equipment, by
$4,000,000. The inventories will increase by 30%, accounts receivable will increase by 20%,
and marketable securities will be reduced by 50% to help finance the expansion. If all other
asset accounts remain the same and long-term debt will be used to finance the remaining
costs of the expansion (no change in common stock or retained earnings), prepare a pro
forma balance sheet for 2020. How much additional debt will be estimated using this pro
forma balance sheet?
UMPI Company
Balance Sheet
December 31,2019
Current Assets
Current Liabilities
Accounts Payable $$,622,000
Other Current Liabilities $3,268,000
Total Current Liabilities
Long-term Liabilities
$8,890,000
Long-Term Debt $1,314,000
Other Long-term Liab. $2,839,000
Total Long-Term Liabilities
TOTAL LIABILITIES
$4,153,000$13,043,000
Owners' Equity
TOTAL OWNERS' EQUITY
TOTAL LIABILITIES & OWNER'S EQUITY
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