Suppose 2020 revenues increase by 25 percent over 2019 revenues. Use the constant growth method to develop a pro forma balance sheet and income statement, but you only need to complete for the first pass. Assume that Gainesville cannot sell any fixed assets and that any financing required is borrowed as notes payable at an interest rate of 12 percent. What would be the external funding requirement after the first pass?

Operating costs			$30,783
Earnings before interest and taxes			$5,217
Interest			$1,017
Earnings before taxes			$4,200
Taxes (21%)			$1,680
Net income			$2,520
Dividends (60%)			$1,512
Addition to retained earnings			$1,008

		$2,500
		$2,131
		$3,400
		$3,225