Table 4.4 Use the Percent-Of-Sales Method to Prepare a Pro Forma Income

question 39

Multiple Choice

Table 4.4
Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2015, for Hennesaw Lumber, Inc.
Hennesaw Lumber, Inc. estimates that its sales in 2000 will be $4,500,000. Interest expense is to remain unchanged at $105,000 and the firm plans to pay cash dividends of $150,000 during 2015. Hennesaw Lumber, Inc.'s income statement for the year ended December 31, 2014 is shown below. From your preparation of the pro forma income statement, answer the following multiple choice questions.
-The pro forma net profits after taxes for 2015 are ________. (See Table 4.4)

• A) $202,500
• B) $207,000
• C) $52,500
• D) $57,000

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Definitions:

Pavlovian Conditioning

A learning process that involves associating a previously neutral stimulus with an unconditioned stimulus to elicit a conditioned response similar to the unconditioned response.

Conditioned Stimulus (CS)

A previously neutral stimulus that, after being repeatedly presented prior to an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus (UCS)

A stimulus that elicits a reaction automatically, without any pre-existing learning required.

Vicarious Conditioning

The development of the conditioned response to a stimulus after observation of the pairing of conditioned stimulus (CS) and unconditioned stimulus (UCS).