Problem 4-25 Capacity Usage and Growth [LO2) - Sell fixed assets The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $757,000 Costs 592,000 Other expenses 28,000 Earnings before interest and taxes $ 137,000 Interest paid 24,000 Taxable income $ 113,000 Taxes (24%) 27,120 Net Income $ 85,880 Dividends Addition to retained earnings $26,623 59,257 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Saved CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 21,640 Accounts payable $ 55,800 Accounts receivable 44,580 Notes payable 15,000 Inventory 101,960 Total $ 70,800 Total $ 140,000 Fixed assets Net plant and equipment $ 168,180 Long-term debt Owners' equity $433,000 Common stock and paid-in surplus Retained earnings $ 119,500 270,880 Total $390,380 Total assets $ 601,180 Total liabilities and owners' equity $ 601,180 In 2017, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations.) Pro Forma Income Statement Sales Costs In 2017, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round Intermediate calculations.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes Net income Assets Current assets Cash Accounts receivable Inventory Total Pro Forma Balance Sheet Liabilities and Owners' Equity Current labilities Accounts payable Notes payable Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings Total Total abilities and owners equity Fixed assets Net plant and equipment Total assets What is the EFN? (Do not round Intermediate calculations. A negative answer should be indicated by a minus sign.) EFN