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The most recent financial statements for Retro Machine, Inc., follow. Sales for 2014 are projected to grow by 20 percent. Interest expense will remain constant;

The most recent financial statements for Retro Machine, Inc., follow. Sales for 2014 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.

RETRO MACHINE, INC. 2013 Income Statement
Sales $ 725,000
Costs 591,000
Other expenses 12,000
Earnings before interest and taxes $ 122,000
Interest paid 14,000
Taxable income $ 108,000
Taxes (50%) 54,000
Net income $ 54,000
Dividends $ 33,360
Addition to retained earnings 20,640

RETRO MACHINE, INC. Balance Sheet as of December 31, 2013
Assets Liabilities and Owners Equity
Current assets Current liabilities
Cash $ 21,540 Accounts payable $ 55,700
Accounts receivable 33,860 Notes payable 14,900
Inventory 70,820 Total $ 70,600
Total $ 126,220 Long-term debt $ 139,000
Fixed assets Owners equity
Net plant and equipment $ 280,000 Common stock and paid-in surplus $ 125,000
Accumulated retained earnings 71,620
Total $ 196,620
Total assets $ 406,220 Total liabilities and owners equity $ 406,220

The firm is operating at full capacity and no new debt or equity is issued. Calculate the pro forma income statement and balance sheet for the company. (Do not round intermediate calculations.)

Pro Forma Income Statement
Sales $
Costs
Other expenses
EBIT $
Interest
Taxable income $
Taxes (50%)
Net income $

Pro Forma Balance Sheet
Assets Liabilities and Owners Equity
Current assets Current liabilities
Cash $ Accounts payable $
Accounts receivable Notes payable
Inventory Total $
Total $ Long-term debt $
Fixed assets Owners equity
Net plant and equipment $ Common stock and paid-in surplus $
Accumulated retained earnings
Total $
Total assets $ Total liabilities and owners equity $

What external financing is needed to support the 20 percent growth rate in sales? (Do not round intermediate calculations.)

EFN $

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