b. Pro-forma Statements The 2020 Income Statement and Balance Sheet for Longview Products, Inc. (LPI) are shown below. For 20210, the following information is likely: 1. Projected sales are $6,500,000 2. Cost of goods sold in 2019 includes $1,150,000 in fixed costs 3. Operating expense in 2019 includes 400,000 in fixed costs 4. Interest expense will increase to $120,000 5. LPI will pay cash dividends of 40% of net profits after taxes 6. Marketable securities will increase to $500,000; notes payable will decrease to $50,000; while long-term debt and common stock will remain unchanged 7. Cash, inventories, accounts receivable, and accounts payable will change in direct response to the change in sales 8. Manufacturing equipment costing $600,000 will be purchased during the year 9. Total depreciation expense for the year will be $250,000 10. A 21% tax rate will apply a. Prepare a pro forma income statement for the year ending December 31, 2021 using the fixed cost data given to improve the accuracy of the percent-of-sales method b. Prepare a pro-forma balance sheet as of December 31, 2021, FINC2743 Online CH 4 Problem Set.docx For 20210, the following information is likely: 1. Projected sales are $6,500,000 2. Cost of goods sold in 2019 includes $1,150,000 in fixed costs 3. Operating expense in 2019 includes 400,000 in fixed costs 4. Interest expense will increase to $120,000 5. LPI will pay cash dividends of 40% of net profits after taxes 6. Marketable securities will increase to $500,000; notes payable will decrease to $50,000; while long-term debt and common stock will remain unchanged 7. Cash, inventories, accounts receivable, and accounts payable will change in direct response to the change in sales 8. Manufacturing equipment costing $600,000 will be purchased during the year 9. Total depreciation expense for the year will be $250,000 10. A 21% tax rate will apply a. Prepare a pro forma income statement for the year ending December 31, 2021 using the fixed cost data given to improve the accuracy of the percent-of-sales method b. Prepare a pro-forma balance sheet as of December 31, 2021, using the information given and the judgmental approach. Include a reconciliation of the retained earnings account. c. Analyze these statements and discuss the resulting external financing needed, if any