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Krogh Lumber's 2021 financial statements are shown here.

Krogh Lumber: Balance Sheet as of December 31, 2021 (thousands of dollars)
Cash	$1,800		Accounts payable	$7,200
Receivables	10,800		Accrued liabilities	2,520
Inventories	12,600		Notes payable	3,472
Total current assets	$25,200		Total current liabilities	$13,192
			Mortgage bonds	5,000
Net fixed assets	21,600		Common stock	2,000
			Retained earnings	26,608
Total assets	$46,800		Total liabilities and equity	$46,800

Krogh Lumber: Income Statement for December 31, 2021 (thousands of dollars)
	Sales	$36,000
	Operating costs including depreciation	30,783
	Earnings before interest and taxes	$5,217
	Interest	1,017
	Earnings before taxes	$4,200
	Taxes (25%)	1,050
	Net income	$3,150
	Dividends (60%)	$1,890
	Addition to retained earnings	$1,260

Assume that the company was operating at full capacity in 2021 with regard to all items except fixed assets; fixed assets in 2021 were being utilized to only 62.5% of capacity. By what percentage could 2022 sales increase over 2021 sales without the need for an increase in fixed assets? Round your answer to two decimal places. %

Now suppose 2022 sales increase by 25% over 2021 sales. Assume that Krogh cannot sell any fixed assets. All assets other than fixed assets will grow at the same rate as sales; however, after reviewing industry averages, the firm would like to reduce its operating costs/sales ratio to 82% and increase its total liabilities-to-assets ratio to 42%. The firm will maintain its 60% dividend payout ratio, and it currently has 1 million shares outstanding. The firm plans to raise 35% of its 2022 forecasted interest-bearing debt as notes payable, and it will issue bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 10%. Any stock issuances or repurchases will be made at the firm's current stock price of $40. Develop Krogh's projected financial statements. What are the balances of notes payable, bonds, common stock, and retained earnings? Enter your answers in thousands of dollars. For example, an answer of $10 thousands of dollars should be entered as 10,000. Round your answers to two decimal places.

Krogh Lumber: Pro Forma Income Statement December 31, 2022 (thousands of dollars)
	2021		2022
Sales	$36,000		$
Operating costs (includes depreciation)	30,783
EBIT	$5,217		$
Interest expense	1,017
EBT	$4,200		$
Taxes (25%)	1,050
Net Income	$3,150		$
Dividends	$1,890		$
Addition to RE	$1,260		$

Krogh Lumber: Pro Forma Balance Statement December 31, 2022 (thousands of dollars)
	2021		2022
Assets
Cash	$1,800		$
Accounts receivable	10,800
Inventories	12,600
Fixed assets	21,600
Total assets	$46,800		$
Liabilities and Equity
Payables + accruals	$9,720		$
Short-term bank loans	3,472
Total current liabilities	$13,192		$
Long-term bonds	5,000
Total liabilities	$18,192		$
Common stock	2,000
Retained earnings	26,608
Total common equity	$28,608		$
Total liab. and equity	$46,800		$

Krogh Lumber's 2021 finandil statements are thown here. Krogh Lumberi Balance sheet as of December 31, 2021 (thousands of Krogh Lumber Income Statement for December 31, 2021 (thousands of dollars) a. Aseume that the company was operating at ful capacity in 2021 with regard to al ltems except fired assets; -fxed assets in 2021 were being utlited to oniy 62 . 5 wh of Fanaritu. Bu what percentoge could 2022 soles increase over 2021 sales withost the need for an increase in fixed assees? Round your answer to two decimal places. b. Now suppose 2022 sales increase by 25% over 2021 sales. Asume that Krogh cannot sell any foed assets. All assets okner than fixed assets will grow at the same rote an sales: however, after revewing industry averages, the fim would live to reduce its operating costs/sales ratio to b2th and increase its total liablites-to-assets ratio to 42\%. The firm will maintain its 60% thividend peryout ratio, and it currenty hos 1 milon shares outstanding. The firm plans to faise 35% of its 2022 forecasted interest: bearing debt as notes payable, and it will issue boedw for the remalidec. The firm forecasts that its before-tax cost of debt (which incudes both shert- and lorg-term deot) is 10%. Any stock lisumnces or repurchases will be mede ot the firm's current stock price of s40. Develop Krogh's projected financial atatements. What are the halances of notes payable, bonds, common stock, and retained eabnings? Enter your answers in thousands of dolars. For example, an answer of sio thousands of dolars thauld be entered as 10,000 . Round your answers to two declmal places entered as 10,000. Round your answers to two decimal places Krogh Lunber: Pro Forma Income 5tatement December 31, 2022 Krogh Lumber: Pro Forma Balance Statement December 31, 2022