QUESTION. 1. Compute the addition to retained earnings and dividend in 2017. (Hint: You will need to go back to the balance sheet.) 2. Fill out the pro-forma income statement for 2018 based on: - Assumption: (a) sales from 2016 to 2016 are growing in a linear trend. (b) COGS, accounts receivable, inventory, and accounts payable are the only item that changes directly with sales. (c) All other expense or balance-sheet items will remain constant from 2017. (d) Blue Sky plans to purcahse an equipment worth \$ 3 million, which will depreciate over 10 years on a straight line method. The salvage value is expected to be $1 million. - Hint 1. Use =trend(sales cell range, year cell range, 2018) - Hint 2. Go back to the balance sheet to find the additional depreciation amount. QUESTION. 1. Fill out the pro-forma balance statement for 2018 based on the assumption from Tab 2. 2. Find the discretionary financing needed and decide whether this is a surplus or deficit situation