This experiential exercise involves creating a pro forma Balance Sheet and a pro forma Income Statement for XYZ Company. Assume the current year is 2011. To assist you in this endeavor, an Excel worksheet containing XYZs 2010 Income Statement and Balance Sheet has been provided. Develop the two pro forma financial statements for 2011 based upon the following assumptions: The company plans to increase sales by an additional 2 percent in 2011 due to minor price increases. In addition, the firm plans to launch a massive marketing campaign in Asia. The campaign is anticipated to cost $100,000,000 and to add an additional $500,000,000 in sales during 2011. The company plans to invest an additional $400,000,000 in additional research and development in 2011. New plant and equipment is projected to cost $500,000,000, and will be depreciated over 20 years. (Note: Assume the plant and equipment come on line the first day of 2011). Salaries for new employees are estimated at $50,000,000 for 2011. The company plans to finance construction of the new facilities by taking on $500,000,000 in long-term debt. The terms of the transaction include a 10-year balloon loan at 5 percent interest. Interest payments are due on December 31 for each of the next ten years. The company anticipates issuing 100,000,000 new shares of common stock. The firm currently has 296,330,000 outstanding shares of common stock. The new shares are expected to sell for $350 per share. The new offering is expected to occur on January 1, 2011.

Could I have someone review this and let me know if this is correct. Also, if it's not too much trouble, could you show how to got the answer you did If I am in fact wrong? Thanks

XYZ Pro Forma Income Statement	12/31/2010	12/31/2011
(Values in Thousands)
Total Revenue	6,138,560	6,761,331
Cost of Revenue, Total	2,577,088	2,838,540
Gross Profit	3,561,472	3,922,792
Operating Expenses
Selling, General and Administrative Expenses	854,684	1,091,394
Research & Development	599,510	999,510
Depreciation/Amortization	0	25,000
Non Recurring	90,000	0
Total Operating Expenses	1,544,194	2,115,904
Operating Income or Loss	2,017,278	1,806,888
Income from Continuing Operations
Total Other Income/Expenses Net	125,175	137,874
Earnings Before Interest and Taxes	2,142,453	1,944,762
Interest Expense	776	25,776
Income Before Tax	2,141,677	1,918,986
Income Tax Expense	676,280	1,993,129
Net Income from Continuing Operations	1,465,397	1,363,699
Net Income	1,465,397	1,363,699
Preferred Stock and Other Adjustments	0	0
Net Income Applicable To Common Shares	1,465,397	1,363,699

XYX Pro Forma Balance Sheet	12/31/2010	12/31/2011
(Values in Thousands)
Assets
Current Assets
Cash and Equivalents	4,173,211	39,135,011
Short Term Investments	4,157,073	4,157,073
Net Receivables	737,317	811,360
Inventory	0	0
Other Current Assets	229,507	229,507
Total Current Assets	9,297,108	44,332,951
Long Term Investments
Property, Plant and Equipment, Gross	961,749	1,461,749
Goodwill	194,900	194,900
Intangible Assets	82,783	82,783
Less: Accumulated Depreciation	0	-25,000
Other Assets	31,310	31,310
Total Non-Current Assets	1,270,742	1,745,742
Total Assets	10,567,850	46,078,693
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable	672,285	737,986
Short/Current Long Term Debt	0	25,000
Other Current Liabilities*	73,099	73,099
Total Current Liabilities	745,384	836,085
Non-Current Liabilities
Long Term Debt	0	500,000
Deferred Income Taxes*	61,585	61,585
Deferred Long Term Liability Charges	45,887	45,887
Minority Interest*	0	0
Total Non-Current Liabilities	107,472	607,472
Total Liabilities	852,856	1,443,557
Shareholders' Equity
Preferred Stock Equity*	0	0
Common Stock Equity	296,330	39,630
Retained Earnings	2,055,868	3,419,567
Capital Surplus	7,477,792	42,377,792
Other Stockholder Equity	-114,996	-114,996
Total Stockholders' Equity	9,714,994	45,721,993
Total Liabilities/Stockholders Equity	10,567,850	47,165,550