Krogh Lumber: Balance Sheet as of December 31, 2021 (thousands of dollars) Cash $1,800 Accounts payable $7,200 Receivables 10,800 Accrued liabilities 2,520 Inventories 12,600 Notes payable 3,472 Total current assets $25,200 Total current liabilities $13,192 Mortgage bonds 5,000 Net fixed assets 21,600 Common stock 2,000 Retained earnings 26,608 Total assets $46,800 Total liabilities and equity $46,800 Krogh Lumber: Income Statement for December 31, 2021 (thousands of dollars) Sales Operating costs including depreciation Earnings before interest and taxes Interest $36,000 30,783 $5,217 1,017 $4,200 1,050 $3,150 ET Earnings before taxes Taxes (25%) Net income Dividends (60%) Addition to retained earnings $1,890 $1,260 a. Assume that the company was operating at full capacity in 2021 with regard to all items except fixed assets; fixed assets in 2021 were being utilized to only 72% of capacity. By what percentage could 2022 sales increase over 2021 sales without the need for an increase in fixed assets? Round your answer to two decimal places. % b. Now suppose 2022 sales increase by 25% over 2021 sales. Assume that Krogh cannot sell any fixed assets. All assets other than fixed assets will grow at the same rate as sales; however, after reviewing industry averages, the firm would like to reduce its operating costs/sales ratio to 83% and increase its total liabilities-to-assets ratio to 42%. The firm will maintain its 60% dividend payout ratio, and it currently has 1 million shares outstanding. The firm plans to raise 35% of its 2022 forecasted interest-bearing debt as notes payable, and it will issue bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 10%. Any stock issuances or repurchases will be made at the firm's current stock price of $40. Develop Krogh's projected financial statements. What are the balances of notes payable, bonds, common stock, and retained earnings? Enter your answers in thousands of dollars. For example, an answer of $10 thousands of dollars should be entered as 10,000. Round your answers to two decimal places. Krogh Lumber: Pro Forma Income Statement December 31, 2022 (thousands of dollars) 2021 Sales 2022 $36,000 Operating costs (includes depreciation) EBIT 30,783 $ $5,217 Interest expense 1,017 Interest expense 1,017 EBT $4,200 Taxes (25%) 1,050 Net Income $3,150 Dividends $1,890 $ Addition to RE $1,260 Krogh Lumber: Pro Forma Balance Statement December 31, 2022 (thousands of dollars) 2021 2022 Assets Cash $ $ $1,800 Accounts receivable 10,800 Inventories 12,600 Fixed assets 21,600 Total assets $ $46,800 Liabilities and Equity Payables + accruals $ $9,720 Short-term bank loans 3,472 Total current liabilities $ $13,192 Long-term bonds 5,000 Total liabilities $ $18,192 2,000 Common stock Retained earnings 26,608 Total common equity $ $28,608 Total liab. and equity $ $46,800