Pro Forma Income Statement and Balance Sheet

Below is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical sta
additional information provided, construct the firm's pro forma income statement and balance sheet for 2014.

Blue Bill Corporation

Income Statement
For the year ended 2013 Projected
2012 2013 2014
Revenue $60,000 $63,000 $66,150
Cost of goods sold 42,000 44,100 46,305
Gross margin 18,000 18,900 19,845
SG&A expense 6,000 6,300 6,615
Depreciation expense 1,800 2,000 2,200
Earnings Before Interest and Taxes (EBIT) 10,200 10,600 11,030
Interest expense 1,500 1,800 1,900
Taxable income 8,700 8,800 9,130
Income Tax Expense 3,045 3,080 3,196
Net income 5,655 5,720 5,935
Dividends 750 800 850
To retained earnings $4,905 $4,920 $5,085

Additional income statement information:

Sales will increase by 5% in 2014 from 2013 levels.
COGS and SG&A will be the average percent of sales for the last 2 years.
Depreciation expense will increase to $2,200.
Interest expense will be $1,900.
The tax rate is 35%.
Dividend payout will increase to $850.

Blue Bill Corporation

Balance Sheet
December 31, 2013 Projected
2013 2014
Current assets
Cash $8,000 $7,938
Accounts receivable 3,150 3,308
Inventory 9,450 9,923
Total current assets 20,600 $21,168
Property, plant, and equipment (PP&E) 28,500 36,850
Accumulated depreciation 16,400 18,600
Net PP&E 12,100 18,250
Total assets $32,700 $39,418

Current liabilites
 Accounts payable $3,780
Bank loan (10%) 3,200
Other current liabilities 1,250
Total current liabilities 8,230
Long-term debt (12%) 4,800
Common stock 1,250
Retained earnings 18,420
Total liabilities and equity $32,700

Additional balance sheet information:

The minimum cash balance is 12% of sales.
Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sa
$8,350 of new PP&E will be purchased in 2014.
Other current liabilities will be 3% of sales in 2014.
There will be no changes in the common stock or long-term debt accounts.
The plug figure (the last number entered that makes the balance sheet balance) is bank loan.
 or 2013. Based on the historical statements and the
ement and balance sheet for 2014.
tory) will be the same percent of sales in 2014 as they were in 2013.

ance) is bank loan.