Problem 4-2 Pro Forma Statements and EFN [LO1, 2]

Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):

Income Statement				Balance Sheet
Sales	$	34,000		Assets	$	26,500		Debt	$	7,000
Costs		27,330						Equity		19,500
Net income	$	6,670		Total	$	26,500		Total	$	26,500

The company has predicted a sales increase of 15 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not.

Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.)

Pro forma income statement			Pro forma balance sheet
Sales	$		Assets	$		Debt	$
Costs						Equity
Net income	$		Total	$		Total	$

What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)

External financing needed

$