Pro forma balance sheet peabody & peabody has 2015 sales of $10 million. itwishes to analyze expected performance and financing needs for 2017, which is2 years ahead. given the following information, respond to parts a and b.(1) the percents of sales for items that vary directly with sales are as follows: accounts receivable, 12%inventory, 18%accounts payable, 14%net profit margin, 3%(2) marketable securities and other current liabilities are expected to remainunchanged.(3) a minimum cash balance of $480,000 is desired.(4) a new machine costing $650,000 will be acquired in 2016, and equipmentcosting $850,000 will be purchased in 2017. total depreciation in 2016 isforecast as $290,000, and in 2017 $390,000 of depreciation will be taken.(5) accruals are expected to rise to $500,000 by the end of 2017.(6) no sale or retirement of long-term debt is expected.(7) no sale or repurchase of common stock is expected.(8) the dividend payout of 50% of net profits is expected to continue.(9) sales are expected to be $11 million in 2016 and $12 million in 2017.(10) the december 31, 2015, balance sheet follows.(3) a minimum cash balance of $480,000 is desired.(4) a new machine costing $650,000 will be acquired in 2016, and equipmentcosting $850,000 will be purchased in 2017. total depreciation in 2016 isforecast as $290,000, and in 2017 $390,000 of depreciation will be taken.(5) accruals are expected to rise to $500,000 by the end of 2017.(6) no sale or retirement of long-term debt is expected.(7) no sale or repurchase of common stock is expected.(8) the dividend payout of 50% of net profits is expected to continue.(9) sales are expected to be $11 million in 2016 and $12 million in 2017.(10) the december 31, 2015, balance sheet follows. peabody & peabody balance sheet december 31, 2015 ($000)assets liabilities and stockholders’ equitycash $ 400 accounts payable $1,400marketable securities 200 accruals 400accounts receivable 1,200 other current liabilities 80inventories 1,800 total current liabilities $1,880total current assets $3,600 long-term debt 2,000net fixed assets 4,000 total liabilities 3,880total assets $7,600 common equity 3,720 total liabilities and stockholders’ equity $7,600a. prepare a pro forma balance sheet dated december 31, 2017.b. discuss the financing changes suggested by the statement prepared in part a.