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 Pre-tax earnings $ 680,000 Taxes (25%) 170,000 Net income 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash $ 160,000 Accounts payable $360,000 Receivables 360,000 Line of credit 0 Inventories 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 L&E $5,240,000 Suppose that in 2020 sales increase to $4.4 million and that 2020 dividends will increase to $168,000. 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 11%. 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 $ 4400000 Operating costs $ 3520000 EBIT $ 880000 Interest $ 110000 Pre-tax earnings $ 770000 Taxes (25%) $ 192500 Net income $ 577500 Dividends: $ 168000 Addition to RE: $ 409500 Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2020 Cash $ 177600 Receivables $ 399600 Inventories $ 799200 Total current assets $ 1376400 Fixed assets $ 4440000 Total assets $ 5816400 Accounts payable $ 399600 Line of credit $ 105300 Accruals $ 222000 Total current liabilities $ 726900 LT bonds $ 1000000 Common stock $ 1100000 Retained earnings $ 2989500 Total L&E $ 5816400