Data Table - X (Click on the icon here D in order to copy the contents of the data table below into a spreadsheet.) Information related to financial projections for next year is as follows: (1) Projected sales are $5,993,000. (2) Cost of goods sold last year includes $990,000 in fixed costs. (3) Operating expense last year includes $260,000 in fixed costs. (4) Interest expense will remain unchanged. (5) The firm will pay cash dividends amounting to 35% of net profits after taxes. (6) Cash and inventories will double. (7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. (8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. (9) A new computer system costing $358,000 will be purchased during the year. Total depreciation expense for the year will be $102,000 (10) The tax rate will remain at 40%. a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales method. b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of the retained earnings account. C. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales method. Complete the pro forma income statement for next year below: (Round to the nearest dollar.) Provincial Imports, Inc. Income Statement for the Year Just Ended Sales revenue $5,004,000 Less: Cost of goods sold 2.748.000 Gross profits $2,256,000 Less: Operating expenses 857,000 Operating profits $1,399,000 Less: Interest expense 190.000 Net profits before taxes $1,209,000 Less: Taxes (rate = 40%) 483,600 Net profits after taxes $725,400 Less: Cash dividends 253,890 To retained earnings $471,510 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) 5,993,000 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Pro Forma Income Statement Provincial Imports, Inc. for Next Year (percent-of-sales method) Sales $ Less: Cost of goods sold Gross profits S Less: Operating expenses Operating profits S Less: Interest expense Net profits before taxes S Less: Taxes (rate = 40%) Net profits after taxes $ Less: Cash dividends (35%) To Retained earnings $ Provincial Imports, Inc. Balance Sheet for the Year Just Ended Liabilities and Stockholders' Equity $203.000 Accounts payable $690.000 218.000 Taxes payable 95,000 630.000 Notes payable 198.000 491.000 Other current liabilities 4.500 $1,542,000 Total current liabilities $987.500 1.390,000 Long-term debt 498,500 Common stock 75,000 Retained earnings 1,371,000 $2.932.000 Total liabilities and equity $2,932,000 Total assets Print Done