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 $5,995,000. (2) Cost of goods sold last year includes $1,006,000 in fixed costs. (3) Operating expense last year includes $240,000 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 $364,000 will be purchased during the year. Total depreciation expense for the year will be $114,000. (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 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 $ $ $ $ $ $ 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 Marketable securities Accounts receivable Inventories (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 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 $208,000 232,000 622,000 498,000 $4,990,000 2,743,000 $2,247,000 Print 843,000 $1,404,000 205,000 $1,199,000 479,600 $719,400 251,790 $467,610 Liabilities and Stockholders' Equity Accounts payable Taxes payable Notes payable Other current liabilities Total current liabilities $1,560,000 1,401,000 Long-term debt Common stock Retained earnings $2,961,000 Total liabilities and equity Done $704,000 95,000 204,000 5,300 $1,008,300 496,700 78,000 1,378,000 $2,961,000 - X