Please help me with the Retained Earnings part. I can't figure out how to calculate it.
The most recent financial statements for Retro Machine, Inc., follow. Sales for 2017 are projected to grow by 15 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. RETRO MACHINE, INC 2016 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (38%) Net income Dividends Addition to retained earnings 747,450 580,650 16,950 $149,850 11,700 138,150 52,497 $ 85,653 $26,993 58,660 RETRO MACHINE, INC Balance Sheet as of December 31, 2016 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable Inventory S 23,870 37,030 78,560 Accounts payable Notes payable $ 62,150 15,900 $ 78,050 $142,500 Total Total 139,460 Long-term debt Fixed assets Owners' equity 372650 Common stock and paid-in surplus Accumulated retained earnings $131,000 160,560 $291,560 $ 512,110 Net plant and equipment Total Total assets 512,110 Total liabilities and owners' equity In 2016, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) The most recent financial statements for Retro Machine, Inc., follow. Sales for 2017 are projected to grow by 15 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. RETRO MACHINE, INC 2016 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (38%) Net income Dividends Addition to retained earnings 747,450 580,650 16,950 $149,850 11,700 138,150 52,497 $ 85,653 $26,993 58,660 RETRO MACHINE, INC Balance Sheet as of December 31, 2016 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable Inventory S 23,870 37,030 78,560 Accounts payable Notes payable $ 62,150 15,900 $ 78,050 $142,500 Total Total 139,460 Long-term debt Fixed assets Owners' equity 372650 Common stock and paid-in surplus Accumulated retained earnings $131,000 160,560 $291,560 $ 512,110 Net plant and equipment Total Total assets 512,110 Total liabilities and owners' equity In 2016, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that the company cannot sell fixed assets. This implies that asset utilization may remain less than 100 percent next year as well. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
