Problem 3-22a Capacity Usage and Growth (LO2] - Do not sell fixed assets The most recent financial statements for Scott, Inc., appear below. Sales for 2020 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets and accounts payable increase spontaneously with sales. SCOTT, INC. 2019 Income Statement Sales Costs Other expenses $749,000 584,000 20,000 Earnings before interest and taxes Interest expense $145,000 16,000 Taxable income Taxes (21%) $129,000 27,090 Net income $101,910 Dividends Addition to retained earnings $31,592 70,318 SCOTT, INC. Balance Sheet as of December 31, 2019 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 20,840 Accounts payable $ 55,000 Accounts receivable 43,780 Notes payable 14,200 Inventory 93,960 Total $ 69,200 Total $ 158,580 Long-term debt $ 132,000 Fixed assets Net plant and equipment $425,000 Owners' equity Common stock and paid-in surplus Retained earnings $ 115,500 266,880 Total $382,380 Total assets $583,580 Total liabilities and owners' equity $583,580 In 2019, the firm operated at 80 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.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes (21%) Net income Pro Forma Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts payable Notes payable Accounts receivable Inventory Total Total Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings Fixed assets Net plant and equipment Total Total assets Total liabilities and owners' equity