Larime Corp. is forecasting 20X2 near the end of 20X1. The estimated year-end financial statements and a worksheet for the forecast follow.

Management expects the following next year.
• An 8% increase in revenue.
• Price cutting will cause the cost ratio (COGS/sales) to deteriorate (increase) by 1% (of sales) from its current level.
• Expenses will increase at a rate that is three quarters of that of sales.
• The current accounts will increase proportionately with sales.
• Net fixed assets will increase by $5 million.
• All interest will be paid at 12%.
• Federal and state income taxes will be paid at a combined rate of 43%.
Make a forecast of Larime’s complete income statement and balance sheet. Work to the nearest thousanddollars.

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Larime Corp. Projected Income Statement (Sooo) 20X1 20X2 Revenue COGS Gross margin Expenses EBIT Interest (12%) EBT Income tax (43%) EAT $245,622 142,461 $103,161 $ 49,124 S 54,037 9,642 S 44,395 19,090 S 25,305 100.0 58.0 42.0 20.0 22.0 3.9 18.1 7.8 10.3 100.0 Larime Corp. Projected Balance Sheet (Sooo) 20X1 20X2 20X1 20X2 ASSETS Current assets $178,106 Fixed assets 42,128 LIABILITIES & EQUITY Current liabilities Debt Equity Total $85,700 78,178 156,356 $320,234 $320,234