Consider the following income statement for the Heir Jordan Corporation:
Income Statement
Sales $48,800
Costs $34,800
Taxable income $14,00
Taxes (22%) $3,080
Net Income $10,920
Dividends $2,517
Addition to retained earnings $8,403
The balance sheet for the Heir Jordan Corporation follows.
Balance Sheet
Assets Liabilities and Owners' Equity
Current assets Current liabilities
Cash $2,650 Accounts payable $2,400
Accounts receivable $3,600 Notes payble $5,300
Inventory $900 Total $7,700
Total $15,250 Long-term debt $24,000
Owner's equity
Fixed assets Common stock and paid-in surplus $18,00
Net plant and equipment $38,400 Retained earnings $3,950
Total $21,950
Total assets $53,650 Total liabilities and owners' equity $53,650
Prepare a pro forma balance sheet, assuming an increase in sales of 12%, no new external debt or equity financing, and a constant payout ratio.