Garlington Technology Inc.s 2021 financial statements are shown here. Forecast the financial statements using the forecasted financial statement method. Suppose that in 2022 sales increase by 12% over 2021 sales. 2022 dividends will increase to $120,000. Operating costs will be at their 2022 percentage of sales. Assume the firm operated at full capacity in 2021. Use an interest rate of 15% and assume Interest expense is calculated based Cash does not earn any interest income. Cash does not earn any interest income. Assume that the all new debt will be in the form of a line of credit. Competition is intensifying, which will force Garlington Technology Inc. to change some of its working capital policies. The average accounts receivable collection period will be increased to 50 days. Inventory Days will be increased to 60 days. Accounts payable days will be decreased to 30 days. What is your forecast for the line of credit balance at year-end 2022?

Income statement 2021

Sales $3,600,000

Operating costs 3,279,720

EBIT $320,280

Less Interest 18,280

Earnings before taxes $302,000

Taxes (21%) 63,420

Net income for common $238,580

Dividends $108,000

Addition to retained earnings $130,580

Balance Sheet Assets 2021

Cash $180,000

Accounts receivable 360,000

Inventories 720,000

Total current assets $1,260,000

Net plant and equipment 1,440,000 Total assets $2,700,000

Liabilities and equity

Accounts payable $360,000

Notes payable 156,000

Line of credit -

Accruals 180,000

Total current liabilities $696,000

Common stock 1,800,000

Retained earnings 204,000

Total liabilities and equity $2,700,000