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(Solution Library) Given the balance sheet on Dec. 31, 2000, (shown below) and the information in Problems 1 and 2, prepare a pro forma balance sheet for Dec. 31,

Question: Given the balance sheet on Dec. 31, 2000, (shown below) and the information in Problems 1 and 2, prepare a pro forma balance sheet for Dec. 31, 2001. Stover Mills does not intend to pay dividends. It maintains a $40,000 minimum cash balance and will borrow short-term (notes payable), if necessary, to maintain this minimum.

Stover Mills Balance Sheet Dec. 31, 2000

Cash $ 50,000 Notes payable
Accounts receivable 400,000 Accounts payable 105,000
Inventory 307,500 Accruals 200,000
Current assets 757,500 Current liabilities 305,000
Plant and equipment 885,000 Long-term debt 300,000
less: Accumulated depreciation (225,000) Common stock 500,000
Net fixed assets 660,000 Retained earnings' 312,500
Total assets $1,417,500 Total liabilities and net worth $1,417,500

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