Integrative-Pro forma statements Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet) and financial projections for use in preparing financial plans for the coming year. Information related to financial projections for next year is as follows: (1) Projected sales are $5,997,000. (2) Cost of goods sold last year includes $996,000 in fixed costs. (3) Operating expense last year includes $256,000 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 $348,000 will be purchased during the year. Total depreciation expense for the year will be $113,000. (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.) Pro Forma Income Statement Provincial Imports, Inc. for Next Year (percent-of-sales method) Sales Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=40%) Net profits after taxes Less: Cash dividends (35%) To Retained earnings $ S $ $ $ $ Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Income Statement. for the Year Just Ended Assets Cash (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Provincial Imports, Inc. Balance Sheet for the Year Just Ended Marketable securities Accounts receivable Inventories Total current assets Net fixed assets Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=40%) Net profits after taxes Less: Cash dividends To retained earnings Total assets $4.999,000 2,743,000 $2,256,000 847,000 $1,409,000 202,000 $1,207,000 482.800 $724,200 253,470 $470.730 Liabilities and Stockholders' Equity $207,000 Accounts payable 231,000 Taxes payable 624,000 Notes payable 509,000 Other current liabilities $1,571,000 Total current liabilities 1,390,000 Long-term debt Common stock Retained earnings $2,961,000 Total liabilities and equity Print Done $702,000 95,000 203,000 5,400 $1,005,400 509,600 72,000 1,374,000 $2,961,000 X