Consider the following income statement for the Heir Jordan Corporationstate for the Heir Jordan Corporation

Heir Jordan CoportationIncome Statement

Sales$47, 000

Cost$31, 300

Taxable Income$ 15, 700

Taxes(35%)5,495

Net Income $10, 205

Dividends $2,500

Addition to retained earnings $7, 705

A 20% growth rate in sales is projected.

Prepare a Pro forma income statement assuming costs vary with sales.

Pro Forma Income Statement

Sales $

Costs $

Taxable Income $

Taxes$

Net Income$

What is the projected addition to retained earnings?