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The following is the financial statement of Executive Fruit Company for the year ended December 2014.

INCOME STATEMENT, 2014
(Figures in $ Thousands)
Revenue	$	4,500
Cost of goods sold		4,050
EBIT	$	450
Interest		90
Earnings before taxes	$	360
State and federal tax		144
Net income	$	216
Dividends		144
Additions to retained earnings	$	72

BALANCE SHEET (Year-End, 2014)
(Figures in $ Thousands)
Assets
Net working capital	$	450
Fixed assets		1,800
Total assets	$	2,250
Liabilities and shareholders' equity
Long-term debt	$	900
Shareholders' equity		1,350
Total liabilities and shareholders' equity	$	2,250

The following are the first stage and second stage pro forma financial statements of Executive Fruit Company for the year ended December 2015.

First stage pro forma statements:

PRO FORMA INCOME STATEMENT, 2015
(Figures in $ Thousands)
Revenue	$	4,950
Cost of goods sold		4,455
EBIT	$	495
Interest		90
Earnings before taxes	$	405
State and federal tax		162
Net income	$	243
Dividends		162
Additions to retained earnings	$	81

PRO FORMA BALANCE SHEET (Year-End, 2015)
(Figures in $ Thousands)
Assets
Net working capital	$	495
Fixed assets		1,980
Total assets	$	2,475
Liabilities and shareholders' equity
Long-term debt	$	900
Shareholders' equity		1,431
Total liabilities and shareholders' equity	$	2,331
Required external financing	$	144

Second stage pro forma balance sheet:

PRO FORMA BALANCE SHEET (Year-End, 2015)
(Figures in $ Thousands)
Assets
Net working capital	$	495
Fixed assets		1,980
Total assets	$	2,475
Liabilities and shareholders' equity
Long-term debt	$	1,044
Shareholders' equity		1,431
Total liabilities and shareholders' equity	$	2,475

How would Executive Fruits financial model change if the dividend payout ratio were cut to 1/3? Use the revised model to generate a new financial plan for 2015 assuming that debt is the balancing item. What would be the required external financing? (Do not round intermediate calculations.)

Dividends fall by $ . Therefore, the requirement for external financing falls from $ to $ . On the other hand, shareholders' equity will be increased by $ .

The right-hand side of the balance sheet becomes (Do not round intermediate calculations. Enter your answers in thousands.):

Long-term debt	$
Shareholders' equity
Total	$

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