. Premium Foods 2019 income statement is shown on the attachment. Notes Payable of $2,500 (amount in thousands) appears on Premium Foods 2019 balance sheet. Premium Foods management has made the following projections and assumptions for 2020:

1. 2020 sales are projected to increase by 10% over their 2019 level.

2. In 2020, the company plans to pay out 50 percent of its Net Income as dividends; the other 50 percent of Net Income will be additions to Retained Earnings, as in 2019.

3. An interest rate of 5 percent applies in 2020 to the debt balance (Notes Payable at the beginning of the year).

4. An income tax rate of 22% applies in 2020, as in 2019.

Construct the projected 2020 income statement using the Forecasted Financial Statements (FFS) method. Assume the firm operated at full capacity in 2019. Please enter the numerical values for the 2020 projected income statement, along with your assumptions, on the Excel template available below

		Premium Foods, Inc.
		Pro Forma Income Statement
		For the Year Ended December 31, 2020
		(Thousands of Dollars)
		% of		Projected
	2019	Sales	Forecast Basis	2020
Sales	7,000
Operating Costs	3,000
EBIT	4,000
Less: Interest	200
EBT	3,800
Less: Taxes @ 22%	836
Net Income	2,964
Dividends	1,482		50% of "Net Income"
Addition to Retained Earnings	1,482		Net Income - Dividends
2020 Projected "Interest Expense:"
Assume that "Notes Payable" remains at its 2019 level.
A 5% annual interest rate applies to debt
outstanding in "Notes Payable" as of January 1, 2020.
Notes Payable			2,500
X 5% annual rate			X
Projected 2020 "Interest Expense"