The following Income Statement and Balance Sheet should be used:

Creative Analysis, Inc. 2015 Income Statement

Net sales

$8,500

Cost of goods sold

7,210

Depreciation

400

Earnings before interest and taxes

890

Interest paid

40

Taxable Income

$850

Taxes

310

Net Income

$540

Dividends

$324

Addition to retained earnings

$216

Creative Analysis, Inc. 2015 Balance Sheet

Cash

$1,600

Accounts Payable

$2,075

Accounts Rec.

975

Long-term debt

425

Inventory

2,425

Common stock

3,000

Total

$5,000

Retained earnings

1,700

Net fixed assets

2,200

Total assets

$7,200

Total Liabilities & equity

$7,200

Assume the profit margin and the dividend payout ratio of Creative Analysis, Inc. are constant. If sales increase by 8 percent, what is the pro forma retained earnings?

Select one: a. $1,870.00 b. $237.60 c. $356.40 d. $1,933.28