Peabody & Peabody has 2015 sales of $10.2 million. Itwishes to analyze expected performance and financing needs for 2017, which is-- 2 years ahead. Given the following information, respond to parts a and b.

(1)The percents of sales for items that vary directly with sales are as follows: Accounts receivable, 11.7%; Inventory, 17.6%; Accounts payable, 13.7%; Net profit margin, 2.7%

(2) Marketable securities and other current liabilities are expected to remain unchanged.

(3) A minimum cash balance of $483,000 is desired.

(4) A new machine costing $650,000 will be acquired in 2016, and equipment costing $848,000 will be purchased in 2017. Total depreciation in 2016 is forecast as $286,000, and in 2017 $393,000 of depreciation will be taken.

(5) Accruals are expected to rise to $501,000 by the end of 2017.

(6) No sale or retirement of long-term debt is expected.

(7) No sale or repurchase of common stock is expected.

(8) The dividend payout of 50% of net profits is expected to continue.

(9) Sales are expected to be $11.4 million in 2016 and $11.1 million in 2017.

(10) The December 31, 2015, balance sheet is here.

Balance Sheet December 31, 2015

Assets	Liabilities and Stock Holders' Equity
Cash $402,000	Accounts Payable $1,398,000
Marketable securities $202,000	Accurals $400,000
Accounts Receivable $1,201,000	Other current liabilities $80,400
Inventories $1,803,000	Total current liabilities $1,878,400
Total current assets $3,608,000	Long-term debt $2,013,600
Net fixed assets $3,999,000	Common stock $3,715,000
Total assets $7,607,000	Total liabilites and stockholders' equity $7,607,000

a. Prepare a pro forma balance sheet dated December 31, 2017.

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a. Prepare a pro forma balance sheet dated December 31, 2017.

Complete the assets part of the pro forma balance sheet for Peabody & Peabody for December 31, 2017 below: (Round to the nearest dollar.)

Peabody & Peabody Balance Sheet December 31, 2015 ($000)

Assets

Current Assets

Cash $?

Marketable Securities $?

Accounts receivable $?

Inventories $?

Total current assets $?

Net fixed assets $?

Total assets $?

Complete the liabilities and stockholders' equity part of the pro forma balance sheet for Peabody & Peabody for December 31, 2017 below. (Round to the nearest dollar.)

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Liabilities and stockholders' equity

Current liabilities

Accounts payable $?

Accurals $?

Other current liabilities $?

Total current liabilities $?

Long-term debt $?

Total liabilities $?

Common stock and Retained Earnings $?

External funds required $?

Total liabilities and stockholders' equity $?