The following are the balance sheet and income statements for the year that just ended:,,Sales 1,400,Operating Costs 1,150,EBIT 250,Interest 20,EBT 230,Taxes (30%) 69,Net income 161,Dividend 0,,,Cash ,60 ,Accounts payable ,50,,Account receivable ,80 ,Notes payable ,70,,Inventories ,100 ,Long-term debt ,150,,Fixed assets ,250 ,Common stock ,50,, , ,Retained earnings ,170,,Total assets ,490 ,Total liab. & equity ,490,,Fixed assets are being used at full capacity and can be increased only by increments of 50%. Sales for the next year are expected to increase by 30%.,Use the percent of sales method to construct a 1st pass pro forma income statement and balance sheet. For the 2nd pass, assume that all the additional needed funds will come in the form of notes payable at an interest rate of 8%.,
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