The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement   Sales $ 755,000   Costs 590,000   Other expenses 26,000   Earnings before interest and taxes $ 139,000   Interest paid 22,000   Taxable income $ 117,000   Taxes (22%) 25,740   Net income $ 91,260   Dividends $ 28,291   Addition to retained earnings 62,969 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners’ Equity   Current assets   Current liabilities     Cash $ 21,440     Accounts payable $ 55,600     Accounts receivable 44,380     Notes payable 14,800     Inventory 99,960       Total $ 70,400       Total $ 165,780   Long-term debt $ 138,000   Fixed assets   Owners’ equity     Net plant and equipment $ 431,000     Common stock and paid-in surplus $ 118,500     Retained earnings 269,880       Total $ 388,380   Total assets $ 596,780   Total liabilities and owners’ equity $ 596,780 In 2017, the firm operated at 80 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes Net income Pro Forma Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash Accounts payable Accounts receivable Notes payable Inventory Total Total Long-term debt Owners’ equity Fixed assets Common stock and paid-in surplus Net plant and equipment Retained earnings Total Total assets Total liabilities and owners’ equity What is the EFN? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) EFN = .

1. The most recent financial statements for Crosby, Inc., follow.
Sales for 2018 are projected to grow by 30 percent. Interest
expense will remain constant; the tax rate and the dividend
payout rate will also remain constant. Costs, other expenses,
current assets, and accounts payable increase spontaneously
with sales.
CROSBY, INC.
2017 Income Statement
Sales
$
755,000
Costs
590,000
Other expenses
26,000

2. Earnings before interest and taxes
$
139,000
Interest paid
22,000
Taxable income
$
117,000
Taxes (22%)

3. 25,740
Net income
$
91,260
Dividends
$
28,291
Addition to retained earnings
62,969

4. CROSBY, INC.
Balance Sheet as of December 31, 2017
Assets
Liabilities and Owners’ Equity
Current assets
Current liabilities
Cash
$
21,440
Accounts payable
$
55,600
Accounts receivable
44,380
Notes payable
14,800

5. Inventory
99,960
Total
$
70,400
Total
$
165,780
Long-term debt
$
138,000

6. Fixed assets
Owners’ equity
Net plant and equipment
$
431,000
Common stock and paid-in surplus
$
118,500
Retained earnings
269,880

7. Total
$
388,380
Total assets
$
596,780
Total liabilities and owners’ equity
$
596,780

8. In 2017, the firm operated at 80 percent of capacity. Construct
the pro forma income statement and balance sheet for the
company. Assume that fixed assets are sold so that the company
has a 100 percent asset utilization. (Do not round intermediate
calculations.)
Pro Forma Income Statement
Sales
Costs
Other expenses
EBIT
Interest
Taxable income
Taxes
Net income
Pro Forma Balance Sheet
Assets
Liabilities and Owners’ Equity
Current assets
Current liabilities

9. Cash
Accounts payable
Accounts receivable
Notes payable
Inventory
Total
Total
Long-term debt
Owners’ equity
Fixed assets
Common stock and paid-in surplus
Net plant and equipment
Retained earnings
Total
Total assets
Total liabilities and owners’ equity

10. What is the EFN? (Do not round intermediate calculations. A
negative answer should be indicated by a minus sign.)
EFN =