Develop a pro forma income statement and balance sheet for the company given below. Use the following assumptions in making your pro forma:

Currently, fixed assets are at full capacity

Each asset grows proportionally with sales

Payables and accruals grow proportionally with sales

2017s profit margin (2.52%) and dividend payout (30%) will be maintained in 2018

Sales are projected to increase by $500 million (25%)

Interest payments will not change (this is not realistic, but will save you some steps)

All additional funds needed will be raised through long term debt (again, this will save steps)

Income Statement (in millions)

December 31, 2017 Factor December 31, 2018 (expected)

Sales $ 2,000 x 1.25 $ 2,500

Less: Variable Costs (60%) 1,200

Fixed Costs 700

Earnings before int. & taxes $ 100

Interest 16 16

Earnings before taxes $ 84

Taxes (40%) 33.6

Net Income $ 50.4

Dividends (30%) 15.12

Addition to Retained Earnings $ 35.28

Balance Sheet (in millions)

2017 2018 (Expected)

Assets:

Cash and securities $ 20

Accounts Receivable 240

Inventory 240

Total Current Assets $ 500

Net Fixed Assets 500

Total Assets $1,000

Liabilities and Equity:

Accounts Payable and Accruals $ 100

Notes Payable 100

Total Current Liabilities $ 200

Long-term Debt $ 100

Common Stock 500

Retained Earnings 200

Total Claims $1,000

Additional Funds Needed:

Please show the steps on calucating long-term debt, common stock, retained earnings, total claims, and additonal funds needed.