Provincial Imports Berhad, has assembled past $(2023)$ financial statements $($income statement

below and statement of financial position$)$ and financial projections for use in preparing

financial plans for the year $2024.$

Provincial Imports Berhad, Statement of Comprehensive Income

for the Year Ended December $31,2023$

Sales revenue RM $5,000,000$

Less: Cost of goods sold RM $2,750,000$

Gross profits RM $2,250,000$

Less: Operating expenses RM $850,000$

Operating profits RM $1,400,000$

Less: Interest expense RM $200,000$

Net profits before taxes RM $1,200,000$

Less: Taxes $($rate $=40\%)$ RM $480,000$

Net profits after taxes RM $720,000$

Less: Cash dividends RM $288,000$

Retained Earnings RM $432,000$

Provincial Imports Berhad, Statement of Financial Position

for the Year Ended December $31,2023$

Assets RM Liabilities and Stockholders$$ Equity RM

Cash $200,000$ Accounts payable $700,000$

Marketable securities $225,000$ Taxes payable $95,000$

Accounts receivable $625,000$ Notes payable $200,000$

Inventories $500,000$ Other current liabilities $5,000$

Total current assets $1,600,000$ Total current liabilities $1,000,000$

Net fixed assets $1,400,000$ Long$-$term debt $500,000$

Total assets $2,950,000$ Total liabilities $1,500,000$

Common stock $75,000$

Retained earnings $1,375,000$

Total liabilities and equity $2,950,000$

Information related to financial projections for the year $2024$:

$1)$ Projected sales are RM $6,000,000.$

$2)$ Cost of goods sold in $2018$ includes RM $1,000,000$ in fixed costs.

$3)$ Operating expense in $2018$ includes RM $250,000$ in fixed costs.

$4)$ Interest expense will remain unchanged.

$5)$ The firm will pay cash dividends amounting to $40\%$ of net profits after taxes.

$6)$ Cash and inventories will double.

$7)$ Marketable securities$,$ notes payable, long$-$term debt, and common stock will remain

unchanged.

$8)$ Accounts receivable, accounts payable, and other current liabilities will change in

direct response to the change in sales.

$9)$ A new computer system costing RM $356,000$ will be purchased during the year. Total

depreciation expense for the year will be RM $110,000.$

$10)$ The tax rate will remain at $40\%.$

Requirement:

a$.$ Prepare a pro forma income statement for the year ended December $31,2024,$ using the

fixed cost data given to improve the accuracy of the percent$-$of$-$sales method.

$(10$ marks$)$

b$.$ Prepare a pro forma balance sheet as of December $31,2024,$ using the information

given and the judgemental approach. Include a reconciliation of the retained earnings

account. $(15$ marks$)$

c$.$ Analyze these statements, and discuss the resulting external financing required.

$(5$ marks