Outlaws is a general goods retail chain in the High Plains region.Outlaws is forecasting its financial statements for Year 7.Selected financial information for Year 6 is provided in the table.What is long term debt,the plug variable,for the forecasted year? To calculate forecasted current liabilities use the percentage of sales method based on Year 6 figures.Assume that no dividends are paid in Year 7.
Selected Financial Information
Outlaws Inc.($ millions)

Question

Quizplus · Accepted Answer

Calculate Total Current Liabilities: % of sales from Year 6: 12.4991% A/P: Sales (30,817) × (0.124991) = $3,852 Long Term Debt₇ = Total Assets - Total Shareholders' Equity - Total Current Liabilities Total Shareholder's Equity₇ = Common Stock₇ + Retained Earnings₇ Retained Earnings₇ = Retained Earnings₆ + Net Income₇ - Dividends₇ Retained Earnings₇ = 5,089 + 685 - 0 = $5,774 Total Shareholders' Equity₇ = 1,192 + 5,774 = $6,966 Long Term Debt₇ = $14,645 - $6,966 - $3,852 = $3,827

Outlaws Is a General Goods Retail Chain in the High