The most recent financial statements for Zoso, Inc., are shown here (assuming no income taxes): Income Statement Balance...

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Finance

The most recent financial statements for Zoso, Inc., are shownhere (assuming no income taxes):
  Income Statement Balance Sheet
  Sales $4,500     Assets $15,300     Debt $10,400
  Costs 3,440     Equity 4,900
    Net income
$1,060
    Total
$15,300
    Total
$15,300
Assets and costs are proportional to sales. Debt and equity arenot. No dividends are paid. Next year's sales are projected to be$5,959.
Required:
What is the external financing needed? (Do not roundyour intermediate calculations.)

Answer & Explanation Solved by verified expert

4.3 Ratings (531 Votes)

Solution as given assets and costs are in proportion to sales Therefore Assetsales 153004500 34 This implies that asset is 34 times of sales So when sales increases to 5959 asset becomes 34 times See Answer

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Transcribed Image Text

The most recent financial statements for Zoso, Inc., are shownhere (assuming no income taxes): Income StatementBalance Sheet Sales$4,500 Assets$15,300 Debt$10,400 Costs3,440 Equity4,900 Net income$1,060 Total$15,300 Total$15,300 Assets and costs are proportional to sales. Debt and equity arenot. No dividends are paid. Next year's sales are projected to be$5,959.Required:What is the external financing needed? (Do not roundyour intermediate calculations.)

Income Statement		Balance Sheet
Sales	$4,500	Assets	$15,300	Debt	$10,400
Costs	3,440			Equity	4,900
Net income	$1,060	Total	$15,300	Total	$15,300