1.: Morrissey Technologies Inc.'s 2016 financial statements are shown here.

Morrissey Technologies Inc.: Balance Sheet as of December 31, 2016

Cash

$180,000

Accounts payable

$360,000

Receivables

360,000

Notes payable

56,000

Inventories

720,000

Accrued liabilities

180,000

Total current assets

$1,260,000

Total current liabilities

$596,000

Long-term debt

100,000

Fixed assets

1,440,000

Common stock

1,600,000

Retained earnings

204,000

Total assets

$2,700,000

Total liabilities and equity

$2,700,000

Morrissey Technologies Inc.: Income Statement for December 31, 2016

Sales

$3,600,000

Operating costs including depreciation

3,279,720

EBIT

$320,280

Interest

20,280

EBT

$300,000

Taxes (40%)

120,000

Net Income

$180,000

Per Share Data:

Common stock price

$45.00

Earnings per share (EPS)

$1.80

Dividends per share (DPS)

$0.20

Suppose that in 2017, sales increase by 25% over 2016 sales. The firm currently has 200,000 shares outstanding. It expects to maintain its 2016 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capacity. However, the firm would like to reduce its operating costs/sales ratio to 78.5%. The firm will raise 30% of the 2017 forecasted interest-bearing debt as notes payable, and it will issue long-term bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short-term and long-term debt) is 8.5%. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $45.

Construct the forecasted financial statements assuming that these changes are made. What are the firm's forecasted notes payable and long-term debt balances? What is the forecasted addition to retained earnings? Round your answers to the nearest cent.