Garlington Technologies Inc.’s 2021 financial statements are shown here. Suppose that in 2022 sales increase to $4.4 million and that 2022 dividends will increase to $200,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2021. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. 

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Income Statement for December 31, 2021 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (25%) Net income Dividends $4,000,000 3,200,000 $ 800,000 120,000 $ 680,000 170,000 $ 510,000 $ 190,000