onsider the pro formaincome statement given below, developed using these assumptions:

• Sales will increase by 25 percent.
• The dividend payouts will increase from 40 percent to 55 percent.
• Variable costs will be 5 percentage points less than the original percentage of sales.

Income Statement

2018

Est. 2019

Sales

1,000

1,250

Variable Costs

500

563

Fixed Costs

160

160

Net Income

340

527

Dividends

136

290

Now consider the company's 2018 Balance Sheet:

Balance Sheet

2018

Est. 2019

Cash

2,000

Accounts Receivable

800

Inventory

500

Plant and Equipment

3,000

Total Assets

6,300

Accounts Payable

300

Notes Payable

200

Long Term Debt

5,000

Total Liabilities

5,500

Common Stock

500

Retained Earnings

300

Total Equity

800

Balance Sheet assumptions for 2019:

• No additional Fixed Assets will be purchased.
• 2018 Notes Payable will be paid off at the end of that year.
• No additional Common Stock will be issued.

1. Calculate the 2019 Balance Sheet projections, completing the above table on the WORKSHEET (round to the nearest dollar for each item) (24 pts.)
2. Calculate the Additional Funds Needed for 2019 based upon the Pro FormaBalance Sheet, entering your answer below (rounded to the nearest dollar) (6 pts.)