A Firm Has Net Income of $32,000 on Sales of $190,000

A firm has net income of $32,000 on sales of $190,000. Sales are expected to increase by 6% next year and the dividend payout ratio is 35%. The firm uses the percentage of sales approach when compiling pro forma statements. What amount is expected to be added to retained earnings next year?

A) $14,300
B) $15,400
C) $15,686
D) $17,550
E) $22,048