Create two years (2020 and 2021) of pro forma income statements and balance sheets and the statement of cash flows, including operating, investing, and financing sections for 2020 only.

Additional Information:

• The relationship between cost of goods sold and sales revenue Is expected to continue in the near term and no inflation is expected.
• Operating expenses include $200,000 in depreciation (fixed expense), the remainder is variable costs tied to sales revenue.
• Fixed assets are adequate to support sales growth for the next two years and long=term debt will decline $200,000 per year.
• Dividend policy calls for 40% of net profits after taxes to be paid before yearend.
• Interest is 10% of long-term debt and notes payable
• Inventory needs to grow at half the rate of sales growth and accounts receivable maintains the same relationship to sales as was the case on December 31, 2019 for 2019 sales. Accounts payable maintains the same relationship to cost of good sold as of December 31, 2019 for 2019 sales.
• Any cash over $500,000 is put in marketable securities, Interest income is negligible
• Other current liabilities are stable.
• Taxes payable are equal to one-half of the current years taxes.
• Assume sales will increase 10% per year for each of the next two years

Income Statement - 2019
Sales Revenue 10,000 units at $250 each	2,500,000.00
Cost of Goods Sold ($100 per unit)	(1,000,000.00)
Gross Profit	1,500,000.00
Operating Expenses	(500,000.00)
Operating Profit	1,000,000.00
Interest Expense	(200,000.00)
Net profits before taxed	800,000.00
Taxes (30%)	(240,000.00)
Net profits after tax	560,000.00
Dividends on common stock	224,000.00
Balance Sheet - 2019
Assets	500,000.00
Marketable Securities	300,000.00
accounts receivable	500,000.00
inventory	400,000.00
total current assets	1,700,000.00
net fixed assets	2,000,000.00
total assets	3,700,000.00
Liabilities and equity
accounts payable	150,000.00
taxes payable	120,000.00
notes payable	200,000.00
other current liabilities	200,000.00
total current liabilities	670,000.00
Long term debt	1,800,000.00
total liabilities	2,470,000.00
common stock	500,000.00
retained earnings	730,000.00
total liabilities and equity	3,700,000.00