Pro-Forma Financial Statements Are Prepared Using the Information Developed in the Budget

question 185

Essay

Pro-forma financial statements are prepared using the information developed in the budget process.These statements reflect the results of operations and the financial position of the organization as if all actions planned in the budget had occurred.Many of the master budget components provide direct input to the pro-forma financial statements.
Required:
For each of the following components of the financial statements, indicate which pro-forma financial statement will show the item (Income Statement or Balance Sheet) and the budget(s) within the master budget where the item originated.Number 1 provides an example.

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Definitions:

Paperback Novels

Books printed on lower-quality paper with soft covers, typically more affordable and portable than their hardcover counterparts.

Gasoline

A volatile, flammable liquid derived from petroleum, used chiefly as fuel in internal-combustion engines.

Inelastic

Describes a situation where the demand for a good or service is relatively unresponsive to changes in price.

FICA

The Federal Insurance Contributions Act, a United States federal payroll tax that funds Social Security and Medicare.