Use the "Percent of Sales Method" of Preparing Pro Forma

question 49

Multiple Choice

Use the "percent of sales method" of preparing pro forma financial statements to determine the projection for next year's inventory.Make the following assumptions: current year's sales are $27,800,000; current year's cost of goods sold is $17,528,000; sales are expected to rise by 30%.The firm's investment in inventory in the current year is $5,890,200.What is the projection for next year's inventory?

• A) $7,657,260
• B) $6,981,250
• C) $5,845,500
• D) $4,526,600

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Definitions:

L-Serine

An α-amino acid important in biosynthesis, which serves as a building block for proteins.

Predominant Form

The most abundant or common form of a substance under specified conditions.

L-Phenylalanine

An essential amino acid with the formula C9H11NO2, used in the biosynthesis of proteins.

Biological pH

The pH range maintained in biological systems and fluids critical for the proper functioning of cells and biochemical processes.