Q. Following is the balance sheet for the end of the year 2007 for Silver Spurs, Inc.:
2007 2008
Current Assets $15,000
Net Fixed Assets 20,000
Total Assets $35,000
Accounts Payable $ 2,000
Notes Payable 1,000
Long-Term Debt 10,000
Common Equity 22,000
Total Liabilities/Equity $35,000
They have generated sales for 2007 of $35,000 resulting in net income of $15,000. Due to the difficulty associated with acquiring raw materials, Silver Spurs has experienced sluggish business that has caused fixed assets to be underutilized. Management thinks it can double sales in 2008 through the introduction of a new product. No new fixed assets will be required and the dividend payout ratio will be 100%. Assume no additional depreciation expense will be taken in 2008. Project next year's balance sheet in the space provided above to find out the additional funding needed (AFN) for this new product. Assume notes payable at the end of 2007 are paid off in 2008.