Integrative-Pro forma statements Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided here to prepare the financial plans. The following financial data are also available: (1) The firm has estimated that its sales for 2020 will be $899,200. (2) The firm expects to pay $35,000 in cash dividends in 2020. (3) The firm wishes to maintain a minimum cash balance of $32,000. (4) Accounts receivable represent approximately 20% of annual sales. (5) The firm's ending inventory will change directly with changes in sales in 2020. (6) A new machine costing $42,200 will be purchased in 2020. Total depreciation for 2020 will be $15,500. (7) Accounts payable will change directly in in response to changes in sales in 2020. (8) Taxes payable will equal one-fourth of the tax liability on the pro forma income statement. (9) Marketable securities, other current liabilities, long-term debt, and common stock will remain unchanged. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. b. Prepare a pro forma balance sheet dated December 31, 2020, using the judgmental approach. c. Analyze these statements, and discuss the resulting external financing required. a. Prepare a pro forma income statement for the year ended December 31, 2020, using the percent-of-sales method. Complete the pro forma income statement for the year ended December 31, 2020 below: (Round to the nearest dollar. Round the percentage of sales to four decimal places.) Pro Forma Income Statement Red Queen Restaurants for the Year Ended December 31, 2020 (percent-of-sales method) Sales $ $ % Less: Cost of goods sold Gross profits $ % Less: Operating expenses Net profits before taxes Less: Taxes (rate = 40%) Net profits after taxes Less: Cash dividends $ $ $ $ $ To Retained earnings Red Queen Restaurants Income Statement for the Year Ended December 31, 2019 Sales revenue $800,800 Less: Cost of goods sold 599,900 Gross profits $200,900 Less: Operating expenses 100,500 Net profits before taxes $100,400 Less: Taxes (rate = 40%) 40,160 Net profits after taxes $60,240 Less: Cash dividends 19,200 To retained earnings $41,040 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Red Queen Restaurants Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Cash $31,800 Accounts payable $100,200 Marketable securities 18,500 Taxes payable 20,600 Accounts receivable 150,000 Other current liabilities 5,000 Inventories 99,700 Total current liabilities $125,800 Total current assets $300,000 Long-term debt $199,700 Net fixed assets 349,600 Common stock $149,100 Retained earnings $175,000 Total assets $649,600 Total liabilities and equity $649,600