Suppose that in 2016 sales of Garlington Technologies Inc. increase by 10% over 2015 sales and that 2016 dividends will increase to $550. Assume the firm operated at full capacity in 2015. Use an interest rate of 10%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new financing will be in the form of a line of credit. Using percent of sales method, forecast the financial statements for 2016 by filling out all blanks. (Round your answers to the nearest dollar. Do not round intermediate calculations.)

Balance Sheet (in $000)

	2015	2016			2015	2016
Cash	$100	$		Accounts payable	$500	$
Inventories	$900	$		Line of credit	$0	$
Total current assets	$1000	$		Total current liabilities	$500	$
Fixed assets	$1000	$		Long-term debt	$1000	$
				Common stock	$200	$
				Retained earnings	$300	$
Total assets	$2000	$		Total liabilities and equity	$2000	$

Income Statement (in $000)

	2015	2016
Sales	$3000	$
Operating costs	$2000	$
EBIT	$1000	$
Interest	$100	$
Pre-tax earnings	$900	$
Taxes (40%)	$360	$
Net income	$540	$
Dividends	$200	$