Provincial imports has assembled 2015 financial statement income and balance sheet and financial projections for use in preparing financial plans for the coming year 2016 2015 statement Sales revenue 5,010,000 Less costs of goods sold 2,759,000 Gross profits 2,251,000 Less operating expense 851,000 Operating profits 1,400,000 Less interest expense 196,000 Net profits before taxes 1,204,000 Less tax ( rate 40%) 481,600 Net profits after tax 722,400 Less cash dividends 325,080 To retained earnings 397,320 Info related to financial projections for 2016 is 1: projected sales are 6,008,000 2: cost of goods sold in 2015 include 999,000 in fixed costs 3: operating expense in 2015 include 247,000 in fixed costs 4: interest expense will remain unchanged 5: the firm will pay cash dividends amounting to 45% 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 costing 348,000 will be purchased during the year. Total depreciation for the year will be 120,000 10: the tax rate will remain at 40% Prepare a pro forma for year ended December 31 2016 using fixed cost data to improve the accuracy of the percent of sales method Sales Less cost of goods sold= Gross profits= Less operating expenses= Operating profits= Less interest expenses = Net profit before taxes = Less tax rate (40%)= Net profits after taxes = Less cash dividends (45%)= To retained earmings= Prepare a pro forma balance sheet as of dec 31 2016 using info given and judgemental approach. Include a reconciliation of the retained earnings acct. NOTE taxes payable for 2016 are about 19.4253% of the 2015 taxes on the income statement . The pro forma value is obtained by taking 19.4253% of the 2016 taxes . Complete the assets of the pro forma balance sheet as of dec 31 2016 Cash= Marketable securities = Acct receivable = Inventories= Total current assets= Net fixed assets = Total assets=complete liabilities and equity part of pro forma balance sheet as of December 31 2016 ( judgemental method) Accounts payable = Taxes payable = Notes payable= Other current liabilities= Total current liabilities= Long term debt= Common stock= Retained earnings external finds required = Total liabilities and stockholders equity= using the judgemental approach the external finds requirement =