FORCASTING PRO FORMA FINANCIAL STATEMENTS: PREPARE A PRO FORMA INCOME STATEMENT AND BALANCE SHEET FOR WEBB ENTERPRISES,WHERE REVENUES ARE EXPECTED TO GROW BY 20% IN 2016. MAKE THE FOLLOWING ASSUMPTIONS IN MAKING YOUR FORECAST OF THE FIRMS BALANCE SHEET FOR 2016: A. The income statement expenses are a constant percent of revenues except for interest, which remains equal in dollar amount to the 2015 level, and taxes, which equal 40% of earnings before taxes. B. The cash and marketable securities balance remains equal to $500, and the remaining current asset accounts and fixed assets increase in proportion to revenues for 2015. C. Net property, plant, and equipment increase in proportion to the increase in revenues and depreciation expeneses for 2016 $2000 D. Accounts payable increase in proportion to firm revenues. E. Owners equity increases by the amount of firm net income for 2011 (no cash dividends are paid). F. Long term debt remains unchanged, and short term debt changes in an amount that balances the balance sheet.

Balance Sheet	2015
Cash and Marketable Securities	$ 500	1.52%
Accounts Receivable	6,000	18.18%
Inventories	9,500	28.79%
Current Assets	$ 16,000	48.48%
Net Property Plant & Equipment	17,000	51.52%
Total	$ 33,000	100.00%
Accounts Payable	$ 7,200	21.82%
Short-term Debt	6,800	20.61%
Current Liabilities	$ 14,000	42.42%
Long-term Debt	7,000	21.21%
Total Liabilities	$ 21,000	63.64%
Total Owners' Equity	12,000	36.36%
Total Liabilities and Owners' Equity	$ 33,000	100.00%
Income Statement	2015
Revenues	$ 30,000	100.00%
Cost of Goods Sold	(20,000)	-66.67%
Gross Profit	$ 10,000	33.33%
Operating Expenses	(8,000)	-26.67%
Net Operating income	$ 2,000	6.67%
Interest Expense	(900)	-3.00%
Earnings before Taxes	$ 1,100	3.67%
Taxes	(400)	-1.33%
Net Income	$ 700	2.33%
Projected growth rate in revenues	20%
Tax rate	40%