Bel-Air, Inc., is a small engineering corporation that surveys land for development. The company has grown rapidly over the past few years, and management has to decide whether to hire new engineers and open new offices. To assess future growth, the company's accountant has gathered budgeted information for the coming year, 2010:

Income taxes due on the coming year's net income will be paid during 2011. Dividends of $75,000 are to be declared and paid during 2010.
1. Prepare a pro-forma income statement and balance sheet for 2010 from which the company president can make expansion decisions.
2. Interpretive Question: On the basis of this information, is the company very profitable?
How should this level of profits affect its expansionplans?

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S 36,000 Ending cash balance. Interest expense. 8,500 Salary expense 154,000 Other expenses (including depreciation) 25,000 Service revenue 21,500 Income tax rate Ending common stock balance Beginning retained earnings balance Ending accounts payable balance Ending equipment balance Ending accumulated depreciation balance.. Ending accounts receivable balance. S 35,000 125,000 41,000 350,000 40%