Presented below is the consolidated statement of earnings for Mann & Miller, Inc.

Required
Using the Mann & Miller Inc. (M&M) consolidated statement of earnings as your base year, prepare pro forma income statements for M&M for 2016 and 2017 using an Excel spreadsheet. Relevant assumptions that you should use include:
1. Sales growth is 10 percent per year.
2. Gross profit margin is 65 percent.
3. Effective income tax rate is 29 percent.
4. Selling, marketing & administrative expenses, research expenses, and other income and expenses net all vary as a function of sales.
5. Purchased in-process R&D, and interest income remain constant at the 2015 level.
6. Interest expense is six percent of the beginning balance of long-term debt.
7. Long-term debt at the end of 2015 is \($2,750\) and increases by five percent each year.

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MANN & MILLER, INC. Consolidated Statement of Earnings ($ millions) 2015 2014 2013 Sales to customers. $36,298 $32,317 $29,172 Cost of goods sold.. 10,447 9,581 8,957 Gross profit.... 25,851 22,736 20,215 Selling, marketing & administrative expense. 12,216 11,260 10,495 Research expense.. 3,957 3,591 3,105 Purchased in-process research & development 189 105 66 Interest income.. (256) (456) (429) Interest expense, net of portion capitalized.. 160 153 204 Other (income) expense, net 294 185 (94) 16,560 14,838 13,347