4. Cola Cola would also like to prepare a proforma balance sheet for 2021. Use the proforma income statement above (to account for retained earnings) and the 2020 balance sheet below to prepare a proforma balance sheet for Cola Cola based on the same 8.25% increase in sales. Assume that all asset accounts as well as accounts payable will increase proportionately with sales. Notes payable, long-term debt, and common stock equity would not increase with sales (they would remain the same on your proforma balance sheet). Retained earnings would not change proportionately as a percentage of sales, but you should account for projected retained earnings for 2021 on your proforma balance sheet. Cash $4,000,000 Accounts payable $12,400,000 Accounts receivable $10,400,000 Notes payable $7,500,000 Inventory $22,900,000 Total current liabilities $19,900,000 Total current assets $37,300,000 Long-term debt $23,000,000 Total liabilities $42,900,000 Net PPE $47,300,000 Common stock $23,200,000 Total fixed assets $47,300,000 Retained earnings $18,500,000 Total owners equity $41,700,000 Total assets $84,600,000 Total liabilities & equity $84,600,000

a. Calculate the amount you would list for retained earnings on the proforma 2021 balance sheet.

b. Based on the 8.25% expected increase in sales for 2021, prepare a proforma balance sheet for Cola Cola.

c. In 3-4 sentences explain what Cola Cola can do to make its balance sheet balance. Be specific.