eBook Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $ 800,000 Interest 120.000 120.000 Pre-tax earnings $ 680,000 Taxes (25%) 170,000 w Net income 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash $ 160,000 Accounts payable $360,000 Recelvables 350.000 0 Inventories 20.20 720,000 Accruals 200,000 Total CA $1,240,000 Total CL $ 560,000 Fixed assets 4,000,000 Long-term bonds 1,000,000 Total Assets $5,240,000 Common stock 1,100,000 RE 2,580,000 Total LE $5,240,000 Suppose that in 2020 sales increase to $4.2 million and that 2020 dividends will increase to $210,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 13%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar Garlington Technologies Inc Pro Forma Income Statement December 31, 2020 Sales $ Operating costs 4,200,000 3,200,000 800,000 EBIT $ Interest 120,000 3 Pre-tax earrings 5 680,000 170,000 3 Taxes (25%) $ Net Income $ 510,000 X Dividends: $ 190,000 3 Addition to RE: s 454,500 Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash S 614,500 x Receivables 360,000 Inventories $ 720,000 3 Total current assets S 1,694,500 x s 4,000,000 Fixed assets Total assets $ 5,694,500 Accounts payable s 360,000 Line of credit S X Accruals $ 200,000 Total current liabilities $ 560,000 1,000,000 LT bonds $ Common stock $ 1,100,000 s X Retained eamings 3,034,500 Total LF S 5,694,500 3 Hide Feedback Partially Correct