CN is North America’s fifth largest railroad. CN is forecasting its fi

CN is North America’s fifth largest railroad. CN 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 forecast current liabilities payable use the percentage of sales method based on Year 6 figures. Assume that no dividends are paid in Year 7.

Selected Financial Information
CN Railway Company ($000’000s)
Year 6 Forecast
Revenue $6,110 $6,721
Net Income 571 655

TOTAL ASSETS $18,924 $20,086
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total Current Liabilities 2,134
Long Term Debt 10,163
Shareholders’ Equity
Common Stock 3,558 3,558
Retained Earnings 2,762
Total Shareholders’ Equity 6,320
Total Liabilities & Shareholders’ Equity $18,924

A) $10,764
B) $10,955
C) $11,179
D) $11,483
E) $11,798

ANSWER

A