Husky Corporation had the following income statement and balance sheet last year.

Sales $50

Cost of goods sold 20

Sell. and Admin. Expenses 8

EBIT 22

Interest 10

EBT 12

Taxes (50%) 6

Net Income 6

Cash 40 Accounts payable 40

Inventory 30 Notes payable 20

Plant and Equipment 90 Long-Term debt 80

Total Assets 160 Common stock 10

Retained Earnings 10

Total Liabilities

Plus equity 160

A. Construct a pro forma income statement and balance sheet for next year under the following assumptions. Assume sales, cash, accounts payable, and inventory will each grow by 10%. Cost of goods sold will increase by 30%, selling and administrative costs will increase by 50%, and interest will double. Taxes are at 50 percent of earnings before tax.

B. Does the company need additional financing next year and if so, how much? If it needs funds, name two ways it can raise the funds?