Reference no: EM133087194

Listed below are 2020 year-end balance sheet and 2020 income statement for Stone Roses Co. Its sales for 2021 are projected to grow by 40% from last year. It is projecting its additional fund needed (AFN) for 2021 with the percentage of sales approach and the assumptions of 80% capacity usage for fixed assets and 60% for the dividend payout ratio. Stone Roses Co. Balance Sheet as of Dec. 31, 2020 Assets Liabilities and Equity Cash $10 A/P and other accruals $150 Accounts receivable 30 Notes payable 90 Inventory 120 Total current liabilities $240 Total current assets $160 Long-term debt 350 Net fixed assets 900 Common stock 370 Retained earnings 100 Total assets $1,060 Total liabilities and equity $1,060 Stone Roses Co. Income Statement for 2020 Sales $600 Variable costs 300 Fixed costs 200 EBIT $100 Interest 20 EBT $80 Taxes (25%) 20 Net income $60 What is the projected net income for 2021? What is the projected addition to retained earnings for 2021? How large could sales have been if the company had operated at full capacity in 2020? What is the projected amount for fixed assets as of the end of 2021? What is the AFN for 2021? Does the AFN represent a surplus or a deficit