Pro Forma Balance SheetProvincial Imports, Inc.for Next Year(Judgmental Method)????????????? Information related to financial projections for next year is as follows:(1) Projected sales are $6,006,000.(2) Cost of goods sold last year includes $998,000 in fixed costs.(3) Operating expense last year includes $246,000 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 $116,00(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 mb. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation ofc. Analyze these statements, and discuss the resulting external financing required.Data table(Click on the icon herein order to copy the contents of the data table below into a spreadsheet.)Provincial Imports, Inc. Income Statementfor the Year Just EndedSales revenue$5,006,000Less: Cost of goods soldGross profitsLess: Operating expenses2,741,000$2,265,000855,000..$1,410,000Operating profitsLess: Interest expense201,000Pro Forma Balance SheetNet profits before taxesLess: Taxes (rate = 40%)$1,209,000Provincial Imports, Inc.483,600Net profits after taxes$725,400for Next YearLess: Cash dividends253,890(Judgmental Method)To retained earnings$471,510Accounts payable(Click on the icon here Din order to copy the contents of the data table below into a spreadsheet.)Taxes payableProvincial Imports, Inc. Balance SheetNotes payablefor the Year Just EndedOther current liabilitiesAssetsLiabilities and Stockholders' EquityAccounts payableTaxes payableCash$190,000$700,000Total current liabilitiesMarketable securities230,00095,000Long-term debt%2424 (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 $116,000(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 mb. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation ofc. Analyze these statements, and discuss the resulting external financing required.Less. Operaling expensesOJ3,000$1,410,000Operating profitsLess: Interest expense201,000$1,209,000Net profits before taxesLess: Taxes (rate = 40%)483,600Net profits after taxes$725,400Less: Cash dividends253,890To retained earnings$471,510(Click on the icon here Din order to copy the contents of the data table below into a spreadsheet.)Accounts payable$Provincial Imports, Inc. Balance SheetTaxes payablefor the Year Just EndedNotes payableAssetsLiabilities and Stockholders' EquityAccounts payableTaxes payableNotes payableCash$190,000$700,000Other current liabilitiesMarketable securities230,00095,000Total current liabilities$Accounts receivable635,000205,000Inventories508,000Other current liabilities4,800Long-term debt$1,563,000$1,004,800512,200Total current assetsTotal current liabilitiesCommon stockNet fixed assets1,408,000Long-term debtRetained earningsCommon stock77,000Retained earnings1,377,000External funds requiredTotal assets$2,971,000Total liabilities and equity$2,971,000Total liabilities and stockholders' equity24

Under Judgmental approach of forecasting financial statements, the pro forma balance sheet uses…

1) Projected sales are $6,006,000. 2) Cost of goods sold last year includes $998,000 in fixed costs. 3) Operating expense last year includes $246,000 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 $116,00 10) The tax rate will remain at 40%. 1. Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent-of-sales m . Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of . Analyze these statements, and discuss the resulting external financing required. 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 $5,006,000 2,741,000 $2,265,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Operating profits Less: Interest expense 855,000 $1,410,000 201,000 $1,209,000 Pro Forma Balance Sheet Net profits before taxes Less: Taxes (rate = 40%) Provincial Imports, Inc. 483,600 Net profits after taxes $725,400 for Next Year 253,890 $471,510 Less: Cash dividends (Judgmental Method) To retained earnings Accounts payable (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Taxes payable Provincial Imports, Inc. Balance Sheet Notes payable for the Year Just Ended Other current liabilities Assets Liabilities and Stockholders' Equity Cash $190,000 Accounts payable $700,00 Total current liabilities Marketable securities 230,000 Taxes payable 95,00 Long-term deht