Information related to financial projections for next year is as follows:

$(1)$ Projected sales are $$5,995,000.$

$(2)$ Cost of goods sold last year includes $$1,006,000$ in fixed costs.

$(3)$ Operating expense last year includes $$240,000$ in fixed costs.

$(4)$ Interest expense will remain unchanged.

$(5)$ The firm will pay cash dividends amounting to $35\%$ of net profits after taxes.

$(6)$ Cash and inventories will double.

$(7)$ Marketable securities$,$ notes payable, long$-$term debt, and common stock will remain unchanged.

$(8)$ Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales.

$(9)$ A new computer system costing $$364,000$ will be purchased during the year. Total depreciation expense for the year will be $$114,000.$

$(10)$ The tax rate will remain at $40\%$

a$.$ Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent$-$of$-$sales method.

b$.$ Prepare a pro forma balance sheet for next year, using the information qiven and the judqmental approach. Include a reconciliation of the retained earnings account.

a$.$ Prepare a pro forma income statement for next year, using the fixed cost data given to improve the accuracy of the percent$-$of$-$sales method.

Complete the pro forma income statement for next year below: $($Round to the nearest dollar.$)$

Data table

$($Click on the icon here $$ in order to copy the contents of the data table below into a spreadsheet.$)$

Provincial Imports, Inc. Income Statement

for the Year Just Ended

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Sales

Pro Forma Income Statement

Provincial Imports, Inc.

for Next Year

$($percent$-$of$-$sales method$)$

Less: Cost of goods sold

Gross profits

Less: Operating expenses

Operating profits

Less: Interest expense

Net profits before taxes

Less: Taxes rate $=40\%)$

Net profits after taxes

Less: Cash dividends $(35\%)$

To Retained earnings

$

$

$

$

$

$

Provincial Imports, Inc. Balance Sheet

for the Year Just Ended