1. Using the financial statements for 2009 as your 'base', assume that Luxio's sales are 20% higher for 2010. Use this projection to prepare the pro forma statements following the requirements listed below. Assume the change in sales is permanent. 2. For the Income Statement: Cost of Goods Sold rate is expected to remain constant; "Depreciation' and 'Interest paid' expenses are expected not to change; The Tax rate is expected to decrease to 32%; and Management is expected to increase the humber of dividends paid by 5% (therefore, the Dividend payout rate will increase by 5%). 3. For the Balance Sheet: "Current assets' change in direct proportion to sales; 'Fixed assets' are being operated at 100% of capacity; "Accounts payable' changes in direct proportion to sales; 'Notes payable' and 'Other' current liabilities do not change; "Common stock' remains unchanged; and Use "Long-term debt' as the plug variable. 4. Determine the amount of External Financing Needed (EFN) under the assumptions. Detail how this external financing is distributed. pro forma Balance Sheet LUXIO GOLF CORP. 2009 Balance Sheets Assets Liabilities & Owner's Equity 2008 2009 2008 2009 Current Assets Current Liabilities 16,215.00 8,000.00 11,145.00 35,360.00 80,000.00 Accounts Payable Notes Payable 17,318.00 10,000.00 Cash 18,270.00 22,150.00 13,865.00 24,876.00 24 Accounts Receivable 12,315.00 Inventory 21,584.00 Other 14,451.00 Total Assets 52,169.00 60,891.00 Total 41,769.00 85,000.00 Long-term Debt Fixed Assets Net Plant & Equipment S 168,326.00 $ 184,735.00 Owner's Equity Common Stock & paid in Retained Earnings Total 20,000.00 85,135.00 S 105,135.00 20,000.00 98,857.00 $ 118,857.00 Total Assets $ 220,495.00 $ 245,626.00 Total Liabilities & Owner's S 220,495.00 $ 245,626.00 LUXIO GOLF CORP. 2009 Income State me nt Sales $ 285,760.00 Cost of Goods Sold. Depreciation Eamings Before Interest & Tax Interest Paid 205,132.00 21,950.00 58,678.00 9,875.00 48,803.00 17,081.05 Taxable Income Taxes (35%) Net Income 31,721.95 S 18,000.00 13,721.95 Dividends Addition to Retained Earnings