Wintergreen, Inc. Income Statement for the Present Year

   Net sales

 $14,650

   Costs

 $12,103

   Taxable income

 $2,547

   Taxes

 $866

   Net income

 $1,681


  Wintergreen, Inc. Balance Sheet for the Present Year

   Cash

 $525

 Accounts payable

 $1,963

   Accounts receivable

 $3,135

 Notes payable

 $2,618

   Inventory

 $976

   Total

 $4,581

     Total

 $4,636

 Long-term debt

 $6,600

   Net fixed assets

 $23,770

 Common stock

 $7,500

 Retained earnings

 $9,725

   Total assets

 $28,406

 Total liabilities and equity

 $28,406

 
 Assets, accounts payable and costs are proportional to sales. Debt and equity are not.

 Sales of Wintergreen, Inc. are expected to increase by 13% next year. The dividend payout ratio is 35%. The company is currently operating at 93% of capacity. What is the projected retained earnings balance at the end of next year?