You are preparing to discuss borrowing needs with your? bank'sloan officer who asks you to prepare? pro-forma financialstatements. Below are the financial statements for the year justended. Your sales department is projecting a 32?% increase insales. Days sales outstanding are expected to improve to 45 days.With respect to inventory and accounts? payable, assume thatpurchases will be ?$10,890,000 and cash payments will be?$9,801,000. The Company expects to invest ?$1,670,000 ?(net of?depreciation) to expand its storage capacity and achieve scalesavings. ? Accordingly, gross profit margins are expected to be25?% in the future. Other expenses are expected to remain the samepercentage of sales. The retention ratio is 45?%. For ease of?calculation, assume interest expense remains the same. Prepare?pro-forma financial statements and determine the amount ofborrowing? needs, which will be reflected in? long-term debt.?(round your answers to the nearest? integer, and fill in allamounts including? totals

Cash	400,000		Sales	?10,000,000
Accounts Receivable	?1,400,000		Cost of Sales	?8,000,000
Inventory	?1,800,000		??Gross Profit	?2,000,000
??Total current Assets	?3,600,000		Operating Expense	?900,000
Fixed Assets	?1,400,000		EBIT	?1,100,000
Total Assets	?5,000,000		Interest Exp	?100,000
			EBT	?1,000,000
Accounts Payable	?1,200,000		Tax? (30%)	?300,000
?Long-term Debt	?1,000,000		Net Income	?700,000
??Total Debt	?2,200,000
Common Stock	?1,300,000
Retained earnings	?1,500,000
??Total Debt and Equity	?5,000,000