PLEASE SHOW STEPS SO I CAN DO IT LATER. THANK YOU.

PLEASE ANSWER BOTH PARTS (A & B)

??Peabody?& Peabody has 2015 sales of $10.3 million. It wishes to analyze expected performance and financing needs for 2017?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; 12.1%?, ?Inventory; 18.1%?; Accounts?payable, 13.8%?; Net profit?margin, 3.5%.

?(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 $653,000 will be acquired in?2016, and equipment costing $852,000 will be purchased in 2017. Total depreciation in 2016 is forecast as $288,000?, and in 2017 $394,000 of depreciation will be taken.

?(5) Accruals are expected to rise to $505,000 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 $11.2 million in 2016 and $11.2 million in 2017.

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

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

b. Discuss the financing changes suggested by the statement prepared in part ?(a?).