Problem 1) Suppose forecasted sales are $26,117 and the gross profit margin is expected to be 35.00 percent. If the forecasted ratio of inventories to cost of sales is 20.00 percent, compute the forecasted inventories balance for the pro forma financial statements.
Problem 2) Suppose beginning-of-year retained earnings are $7,767 and net income is forecasted to be $2,341 for the coming year. If the dividend payout ratio is expected to be 25.00 percent, compute forecasted end-of-year retained earnings.