The most recent financial statements for Retro Machine, Inc., follow. 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. 2016 Income Statement Sales $ 747,000 Costs 582,000 Other expenses 18,000 Earnings before interest and taxes $ 147,000 Interest paid 15,000 Taxable income $ 132,000 Taxes (30%) 39,600 Net income $ 92,400 Dividends $ 18,480 Addition to retained earnings 73,920
RETRO MACHINE, INC. Balance Sheet as of December 31, 2016 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 20,640 Accounts payable $ 54,800 Accounts receivable 32,960 Notes payable 14,000 Inventory 69,920 Total $ 68,800 Total $ 123,520 Long-term debt $ 130,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 116,000 Net plant and equipment $ 410,000 Accumulated retained earnings 218,720 Total $ 334,720 Total assets $ 533,520 Total liabilities and owners’ equity $ 533,520
Complete the pro forma income statements below.