Financial Projections for 2013 Description: Prepare a pro forma income statement table for the year ending December 31, 2013, using the fixed cost data provided to improve the accuracy of the percentage of sales method. Prepare a pro forma balance sheet table as of December 31, 2013, using the information provided and the critical method. Include a retained earnings adjustment account. Analyze these financial statements and comment on the resulting required external financing. Data: Projected sales are $6,000,000. Costs of goods sold in 2012 include $1,000,000 in fixed costs. Operating expenses in 2012 include $250,000 in fixed costs. Interest expenses remain unchanged. The company will pay cash dividends in an amount equal to 40% of net profits after taxes. Inventories and cash will double. Marketable securities, notes payable, long-term debt and common stock will remain unchanged. Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. During the year a new computer system will be purchased at a cost of $356,000. Total depreciation expenses for the year will be $110,000. The tax rate will remain at 40 Important: The pro forma income statement and pro forma balance sheet results for the year ending December 31st needs to be completed in an organized table with the information provided above, just as shown in the following example attached below.

\begin{tabular}{|c|c|} \hline \multicolumn{2}{|c|}{\begin{tabular}{l} Provincial Imports Inc. Income Statement \\ for the Year Ended December 31, 2020 \end{tabular}} \\ \hline Sales Revenue & $5,000,000 \\ \hline Less: Cost of goods sold & 2,750,000 \\ \hline Gross profits & $2,250,000 \\ \hline Less: Operating expenses & 850,000 \\ \hline Operating profits & $1,400,000 \\ \hline Less: Interest expense & 200,000 \\ \hline Net profits before taxes & $1,200,000 \\ \hline Less: Taxes ( rate =21%) & 252,000 \\ \hline Net profits after taxes & $948,000 \\ \hline Less: Cash dividends & 288,000 \\ \hline To retained earnings & $660,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Provincial Imports Inc. \\ Balance Sheet December 31, 2020 \end{tabular}} \\ \hline \multicolumn{2}{|l|}{ Assets } & \multicolumn{2}{|c|}{ Liabilities and stockholders' equity } \\ \hline Cash & $200,000 & Accounts payable & $700,000 \\ \hline Marketable securities & 225,000 & Taxes payable & 95,000 \\ \hline Accounts receivable & 625,000 & Notes payable & 200,000 \\ \hline Inventories & 500,000 & Other current liabilities & 5,000 \\ \hline Total current assets & $1,550,000 & Total current liabilities & $1,000,000 \\ \hline Net fixed assets & 1,400,000 & Long-term debt & 500,000 \\ \hline \multirow[t]{4}{*}{ Total assets } & $2,950,000 & Total liabilities & $1,500,000 \\ \hline & & Common stock & 75,000 \\ \hline & & Retained earnings & 1,375,000 \\ \hline & & Total liabilities and equity & $2,950,000 \\ \hline \end{tabular}