Given below is the comparative Income statement and balance sheets of Merck. You are required to prepare the income statement projection for year 3.

\begin{tabular}{|c|c|c|} \hline & Year 2 & Year 1 \\ \hline \multicolumn{3}{|l|}{ Income Statement } \\ \hline Net sales ........ & $47,716 & $40,343 \\ \hline Cost of goods...... & 28,977 & 22,444 \\ \hline Gross profit & 18,739 & 17,899 \\ \hline Selling, general, and administrative expense. ....... & 6,531 & 6,469 \\ \hline Depreciation and amortization expense ............. & 1,464 & 1,277 \\ \hline & 342 & 329 \\ \hline Income before tax... & 10,402 & 9,824 \\ \hline Income tax expense .... & 3,121 & 3,002 \\ \hline Net income. & $7,282 & $6,822 \\ \hline Outstanding shares. & 2,976 & 2,968 \\ \hline \multicolumn{3}{|l|}{ Balance Sheet } \\ \hline Cash ....... & $3,287 & $4,255 \\ \hline Receivables.... & 5,215 & 5,262 \\ \hline Inventories ................. & 3,579 & 3,022 \\ \hline Other current assets. . . . . . . . & 880 & 1,059 \\ \hline Total current assets.... & 12,961 & 13,598 \\ \hline Property, plant, and equipment ... & 18,956 & 16,707 \\ \hline Accumulated depreciation ........ & 5,853 & 5,225 \\ \hline Net property, plant, and equipment ..... & 13,103 & 11,482 \\ \hline Other noncurrent assets......... & 17,942 & 15,075 \\ \hline Total assets . & $44,006 & $40,155 \\ \hline Accounts payable and accrued liabilities. & $5,904 & $5,391 \\ \hline Short-term debt and current maturities of long-term debt. ... & 4,067 & 3,319 \\ \hline & 1,573 & 1,244 \\ \hline Total current liabilities. . & 11,544 & 9,954 \\ \hline \end{tabular} (continued) \begin{tabular}{|c|c|c|} \hline Deferred income taxes and other liabilities & 11,614 & 11,768 \\ \hline Long-term debt . & 4,799 & 3,601 \\ \hline Total noncurrent liabilities. & 16,413 & 15,369 \\ \hline Common stock & 30 & 30 \\ \hline Capital surplus & 6,907 & 6,266 \\ \hline Retained earnings & 31,500 & 27,395 \\ \hline Treasury stock. ........... & (22,387) & (18,858) \\ \hline Shareholders' equity.... . & 16,050 & 14,833 \\ \hline Total liabilities and equity & $44,007 & $40,154 \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline Uwti. & 18.27% \\ \hline Gross profit margin. & 39.27% \\ \hline Selling, general, and administrative expense/Sales & 13.69% \\ \hline epreciation expense/Prior-year property & 8.76% \\ \hline Interest expense/Prior-year long-term debt....... & 4.94% \\ \hline Income tax expense/Pretax income. & 30.00% \\ \hline Accounts receivable turnover (Sales/Accounts receivable). & 9.15 \\ \hline Inventory turnover (Cost of goods sold/ventory).. . & 8.10 \\ \hline Accounts payable turnover (Cost of goods sold/Accounts payable).. & 4.91 \\ \hline Taxes payable/Tax expense & 50.41% \\ \hline Total assets/Stockholders' equity (financial leverage) & 2.35 \\ \hline Dividends per share & $1.06 \\ \hline Capital expenditures/Sales & 9.04% \\ \hline \end{tabular}