Using the 2012 financial statements for DRE Corporation and this additional information, prepare a pro forma

income statement and balance sheet for the year 2013.

Determine the discretionary financing needed (DFN) and
assume that if the DFN is positive, the company will increase long-term debt, and if DFN is negative, the
company will pay back some long-term debt.
Sales for next year (2013 ) are expected to increase by $300,000 to $1,800,000. The firm is running efficiently and
at full capacity so that all assets and spontaneous liabilities are expected to increase proportionally with sales.
The dividend payout ratio for 2013 will be 40%.
DRE Corporation
2012 Financial Statements
Income Statement ($)
Sales 1,500,000
Net Income 250,000
Balance Sheet ($)
Cash 400,000
Accounts Receivable 450,000
Inventory 350,000
Property, Plant, & Equipment 650,000
Total Assets 1,850,000
Accounts Payable 200,000
Short Term Notes Payable 250,000
Long-term Debt 550,000
Common Stock 200,000
Retained Earnings 650,000
Total Liabilities and Equity 1,850,000

Income Statement ($)
Sales 1,800,000
Net Income 300,000 (250,000/1,500,