The firm has estimated that its sales for $2013$ will be $$846,756$

Cash dividends to be paid by the firm in $2013$ $$37,720$

Minimum cash balance to be maintained by the firm $$28,515$

Accounts receivable percentage of sales $18\%$

The firm's ending inventory will change directly with changes in sales in $2013$

A new machine purchased in $2013$ will cost $$41,679$

Total depreciation for $2013$ will be $$17,000$

Accounts payable will change directly in response to changes in sales in $2013$

Taxes payable will equal one$-$fourth of the tax expense on the pro forma income statement

Marketable securities$,$ other current liabilities, long$-$term debt, and common stock will remain unchanged.

Tenley Inc. Tenley Inc.

Income Statement Balance Sheet

For the year ended December $31,2012$ December $31,2012$

Sales revenue $$800,000$ Assets Liabilities and Stockholder's Equity

Less: Cost of goods sold $600,000$ Cash $$32,000$ Accounts payable $$100,000$

Gross profits $$200,000$ Marketable securities $18,000$ Taxes payable $20,000$

Less: Operating expenses $100,000$ Accounts receivable $150,000$ Other current liabilities $5,000$

Net profit before taxes $$100,000$ Inventories $100,000$ Total current liabilities $$125,000$

Less: Taxes $($rate$=40\%)40,000$ Total current assets $$300,000$ Long$-$term debt $200,000$

Net profit after taxes $$60,000$ Net fixed assets $350,000$ Total liabilities $$325,000$

Total assets $$650,000$ Common stock $150,000$

Less: Cash dividends $20,000$ Retained earnings $175,000$

To retained earnings $$40,000$ Total liabilities and stockholder's equity $$650,000$

Prepare a pro forma balance sheet dated December $31,2013,$ using the judgemental approach.