Financing Deficit Garlington Technologies Inc.'s 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 Cash $ 360,000 156,000 Receivables $ 180,000 Accounts payable 360,000 Notes payable 720,000 Line of credit $1,260,000 Accruals Inventories Total current assets 180,000 Fixed assets 1,440,000 Total current liabilities Common stock Retained earnings $ 696,000 1,800,000 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2016 Sales Operating costs $3,600,000 3,279,720 $ 320,280 EBIT Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income 181,200 Dividends $ 108,000 Suppose that in 2017 sales increase by 5% over 2016 sales and that 2017 dividends will increase to $164,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2016. Use an interest rate of 14%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Round your answers to the nearest dollar. Do not round intermediate calculations. December 31, 2017 Sales Operating costs EBIT Interest Pre-tax earnings Taxes (4096) Net income Dividends: Addition to RE: Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2017 Cash Receivables Inventories Total current assets Fixed assets Total assets Accounts payable Notes payable Accruals Total current liabilities Common stock Retained earnings Total liabilities and equity