Financing Deficit

Garlington Technologies Inc.'s 2021 financial statements are shown below:

Income Statement for December 31, 2021

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, 2021

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 2022 sales increase to $4.4 million and that 2022 dividends will increase to $126,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2021. 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, 2022
Sales		$
Operating costs		$
EBIT		$
Interest		$
Pre-tax earnings		$
Taxes (25%)		$
Net income		$
Dividends:		$
Addition to RE:		$

Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2022
Cash		$
Receivables		$
Inventories		$
Total current assets		$
Fixed assets		$
Total assets		$
Accounts payable		$
Line of credit		$
Accruals		$
Total current liabilities		$
LT bonds		$
Common stock		$
Retained earnings		$
Total L&E		$