Doredo Steel Company is a wholesale steel distributor which purchase steel in carload lots and

sells to several thousand steel users. The nature of the steel business requires that the company maintain

large inventories to take care of customer requirements in the event of mill strikes or other delays.

In examining records from 1992 to 2016, the company found consistent relationships among the

following accounts as a percent of sales:

Current assets

20%

Net fixed assets

70% if Sales < $53 million

80%, otherwise.

Accounts payable

8%

Other current liab.

6%

Profit margin

15%

The company's sales for 2017 were $40 million. The company expects to grow by $6 million per

year over the next 5 years. The company wants to project its financial requirements for each of the next 5

years, assuming that the projected sales levels are achieved. Assume further that the company pays out 25

percent of earnings as dividends.

Construct pro forma balance sheets for the end of each of the next 5 years (from 2018 to 2022),

assuming that 20 percent by issuing long-term debt, and 80 percent by selling new common stock.

Doredo Steel Company

PRO FORMA Balance Sheet

For the Period of 2018-2022

(Thousands of Dollars)

____________________________________________________________________________________

YEAR

2017 2018 2019 2020 2021 2022

Sales

40,000

$0.0

+N5+

+N6+

+N7+

$0.0

Current A

10,000

$0.0

+P8+

+P9+

+P10+

$0.0

Fixed A

26,000

Total

36,000

Acct Payable

5,000

Other cur L

2,500

L/t debt

9,000

Common St

14,000

Retained

5,500

Tot. L&E

36,000

*Interests $120,000 Constant

this is what was provided, I'm confused because 2017's calculations don't seem to match up with the % of sales.