Consider the financial statements for the Carpenter Corporation for 20X1, stated in millions:

Forecasted sales for the years 20X2 through 20X4 are as follows:

a. Using the percent-of-sales method, create a pro forma balance sheet for each of the years 20X2 through 20X4 for the Carpenter Corporation.

b. Using the percent-of-sales method, create a pro forma income statement for each of the years 20X2 through 20X4 for the Carpenter Corporation.

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Balance Sheet Income Statement Current Assets $3,513 Sales $8,995 Net Plant, Property, and 3,492 Cost of Goods Sold 4,901 Equipment Gross Profit $4,094 Other Assets 2,231 Selling, General, and Admin- Total Assets $9,236 istrative Expenses 2,485 Depreciation 700 Current Liabilities $2,190 Operating Profit $1,785 Long-Term Liabilities 2,957 Interest Expense 208 Stockholders' Equity 4,089 Other Nonoperating Items 120 Total Liabilities and Equity $9,236 Taxes 263 Net Profit $1,194 Dividends 1,050 Retained Earnings $144