Create pro forma financial statements from the information provided below Year 1 Sales revenues increase 3.5% Gross margin is 50% SG\&A increases 1.2% $2000 of PP\&E is purchased on January 1 , New PP\&E is depreciated over 10 years Inventory grows in line with COGS Assume that all other asset accounts grow in line with sales (3.5\%). Accounts Payable grow in line with COGS Accrued and deferred income taxes grows in line with taxes. Long-term debt declines by $200 Unless otherwise stated, liability accounts grow in line with sales (3.5%) Treasury Stock purchases equal $300 Average interest cost of all interest bearing debt is 1.6% Dividend payout ratio is 22% Tax rate is 35% Funding requirements should be financed with short-term debt Y2 Sales revenue decline by 2.0% Gross margin declinesto 48% Inventory grows in line with COGS SG\&A declines by 1% $800 of PP\&E is sold on January 1 for $600 cash. (Gross =$800, Accumulated depreciation =$200 ) Annual depreciation expense declines by $80 Assume that all other asset accounts grow in line with sales. (2.0%) Accounts Payable grow in line with COGS Long-term debt declines by $150 Accrued and deferred income taxes grows in line with taxes. Unless otherwise stated, liability accounts grow in line with sales (2.0%) Treasury Stock purchase is $100. Average interest cost of all interest bearing debt is 1.8% Dividend payout ratio changes to 25% Tax rate is 35% Funding requirements should be financed with short-term debt Excess cash is used to retire short-term debt 100 shares of $1 par value common stock is issued for $300. Do not add significant amounts to cash unless Loans \& notes payable is drawn down to zero. Create pro forma financial statements from the information provided below Year 1 Sales revenues increase 3.5% Gross margin is 50% SG\&A increases 1.2% $2000 of PP\&E is purchased on January 1 , New PP\&E is depreciated over 10 years Inventory grows in line with COGS Assume that all other asset accounts grow in line with sales (3.5\%). Accounts Payable grow in line with COGS Accrued and deferred income taxes grows in line with taxes. Long-term debt declines by $200 Unless otherwise stated, liability accounts grow in line with sales (3.5%) Treasury Stock purchases equal $300 Average interest cost of all interest bearing debt is 1.6% Dividend payout ratio is 22% Tax rate is 35% Funding requirements should be financed with short-term debt Y2 Sales revenue decline by 2.0% Gross margin declinesto 48% Inventory grows in line with COGS SG\&A declines by 1% $800 of PP\&E is sold on January 1 for $600 cash. (Gross =$800, Accumulated depreciation =$200 ) Annual depreciation expense declines by $80 Assume that all other asset accounts grow in line with sales. (2.0%) Accounts Payable grow in line with COGS Long-term debt declines by $150 Accrued and deferred income taxes grows in line with taxes. Unless otherwise stated, liability accounts grow in line with sales (2.0%) Treasury Stock purchase is $100. Average interest cost of all interest bearing debt is 1.8% Dividend payout ratio changes to 25% Tax rate is 35% Funding requirements should be financed with short-term debt Excess cash is used to retire short-term debt 100 shares of $1 par value common stock is issued for $300. Do not add significant amounts to cash unless Loans \& notes payable is drawn down to zero