SPEA V$361$ Problem Set $1$

$(10\%+20\%)$ Rosengarten anticipates a $15\%$ growth in sales for the upcoming year.

Provide the Pro Forma Income Statement and Pro Forma Balance Sheet for Rosengarten

Corporation. Assume that Rosengarten maintains a practice of distributing a consistent

fraction of net income as a cash dividend, and that costs remain a constant percentage

of sales.

ROSENGARTEN CORPORATION Income Statement

Sales

Costs

Taxable income

Taxes $(21\%)$

Net income

Dividends

Addition to retained earnings $88$

$$44$

$88$