Magee Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores. Magee's balance sheet as of December 31, 2018,…

Magee Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores. Magee's balance sheet as of December 31, 2018, is shown here (Rs millions):

Balance Sheet as of December 31, 2018AssetsLiabilities and Owners' EquityCurrent assetsCurrent liabilitiesCash Rs. 3.5Accounts Payable Rs. 9.0Accounts Receivable 26.0Notes payable 18.0Inventory 58.0Accruals 8.5Total current assets Rs. 87.5Total Current Liabilities Rs.35.5Fixed assetsLong-term debt 6.0Net plant and equipment Rs. 35.0Owners' equity Common stock and paid-in surplus Rs. 15.0Retained earnings 66.0Total assets Rs. 122.5Total liabilities and owners' equity Rs. 122.5 Sales for 2018 were Rs. 350 million, while net income for the year was Rs. 10.5 million. Magee paid dividends of Rs. 4.2 million to common stockholders. Sales are projected to increase by Rs. 70 million or 20 percent during 2019. The firm is operating at full capacity. Assume that the profit margin and dividend payout ratios remain constant.

a. Using the equation, calculate the external funds needed for next year. b. Construct Magee's pro forma balance sheet for December 31, 2019. Assume that all external capital requirements are met by bank loans and are reflected in notes payable.