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:

Supply Department

A division within an organization responsible for acquiring goods and services necessary for its operations.

Supply Function

A mathematical model that describes the quantity of goods that producers are willing and able to sell at different prices, assuming other factors remain constant.

Integrate Suppliers

The process of closely combining the operations, systems, or processes of suppliers with those of the purchasing company to improve efficiency and coordination.

Conduct Activities

The process of organizing, directing, and overseeing actions or operations in various settings or projects.