Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: CAPTAIN JET INC. INCOME STATEMENT 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change FOR THE YEAR ENDED DECEMBER 31, 2014 2 Gross profit margin is the same as 2014 profit margin Sales Revenue step 1 3 Depreciation expense/Prior PPE (gross) = 4% Less: Sales Return step 2 4 Interest expense/Prior year long-term debt = 6% Net Sales 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth. Cost of Goods Sold step 4 6 Income tax expense/ pre-tax income = 12% Gross Profit step 3 7 A/R turnover is the same as that calculated for year 2014 Utilities Expenses step 5 8 A/P turnover is the same as that calculated for year 2014 Salary and Wages Expenses step 5 9 Inventory turnover is the same as that calculated for year 2014 Rent Expenses step 5 10 There is no change in current assets other than Cash, A/R and inventory Depreciation Expenses step 7 11 Capital expenditure/Sales =7% Interest Expenses step 6 12 Assume no change in long-term assets except for PP&E. Supplies Expenses step 5 13 Assume no change in all liabilities, excpet for A/P Bad Debt Expenses step 5 14 Assume no change in shareholders' Equity except for Retained Earnings Total operating Expenses 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock Earnings before Income Taxes Income Tax Expenses step 8 Earnings after Income Taxes CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year CAPTAIN JET INC. Balance Sheet FOR THE YEAR ENDED DECEMBER 31, 2014 Current Assets Cash LAST STEP Accounts Receivable Step 1 Inventories step 2 Prepaid Insurance step 3 Prepaid Rent step 3 Total Current Assets Non-Current Assets Long-term Investments Investments in equity securities step4 Land held for future development step 4 Property, Plant, and Equipment Buildings step 5 Less: Accumulated Depreciation step 6 Intangible Assets Capitalized Development Costs step 7 Goodwill step 7 Other Identifiable Intangible Assets step 7 Total Non-Current Assets Total Assets Current Liabilities Accounts payable step 8 Salary and Wages Payable step 9 Interest Payable step 9 Unearned Revenue step 9 Income Tax payable step 9 Property taxes payable step 9 Utilities payable step 9 Total Current Liabilities Non-Current Liabilities Notes payable step 10 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock step 12 Preferred Stock (5% dividend) step 12 Paid-in-capital - Common Stock step 12 Paid-in-capital - Preferred Stock step 12 Retained Earnings step 11 Accumulated Other Comprehensive Income step 12 Less: Treasury Stock step 12 Total Stockholders' Equity Total Liabilities and Stockholders' Equity