Krogh Lumber: Income Statement for December 31, 2012 (Thousands of Dollars)

Sales $36,000

Operating costs including depreciation 30,783

Earnings before interest and taxes $5,217

Interest 1,017 Earnings before taxes $4,200

Taxes (40%) 1,680

Net income $2,520

Dividends (60%) $1,512

Addition to retained earnings $1,008

Now suppose 2013 sales increase by 25% over 2012 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 85% and increase its debt-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 2013 total debt as notes payable, and it will issue bonds for the remainder. Its before-tax cost of debt is 10.5%. 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? Round your answers to the nearest hundredth of thousand of dollars.

Krogh Lumber Pro Forma Income Statement December 31, 2013 (Thousands of Dollars)

(2012) Sales: $36,000 ........................................... (2013) Sales: $45,000

(2012) Operating costs $30,783....................................(2013)?

(includes depreciation)

(2012) EBIT $5,217 ....................................................(2013)?

(2012) Interest expense (2012) $1,017 .........................(2013)?

(2012) EBT $4,200 ....................................................(2013)?

(2012) Taxes (40%) 1,680 .........................................(2013)?

(2012) Net Income $2,520 ..........................................(2013)?

(2012) Dividends $1,512 ............................................(2013)?

(2012) Addition to RE $1,008.......................................(2013)?