LG 5 P4-22 Integrative: Pro forma statements Provincial Imports Inc. has assembled last year's financial statements (income statement and balance sheet below) and financial projections for use in preparing financial plans for the coming year. Information related to finandal projections for next year is as followa: 1. Projected sales are $6,000,000. 2. Cost of goods sold last year inchudes 51,000,000 in foced conta. 3. Operating expense laat year inclades $290,000 in fixed costs. 1. Intereat expense will remain unchanged. 5. The firm will pay carh dividends amounting to 40% of net protite atter taxcea. 6. Caah and inventories will double. 7. Marketable necuritien, notes payable, long-term debt, and common atock will remain unchanged. 5. Accounta receivable, acceunto payable, and other current liablbties will change in direct reaponse to the change in sales. 9. A new computer syatem costing 5356,000 will be purchused during the year. Total depreciation expense fos the year will be 5110.0000 10. The tax rate will remain at 21% and taxea payable are 38% of the toc liablity on the income atatement. a. Prepare a pro forma income atatement for next year uaing the froed cost data given to improve the accuracy of the percent-ofsalen method. b. Prepare a pro forma balanse wheet for next year uging the information given and the judgmental approach. Include a reconcliation of the retained earninge account c. Analyere these otatemente, and discuas the rerulting external financing required