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

question 23

Multiple Choice

Table 4.4
Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2010, 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 2010. Hennesaw Lumber, Inc.'s income statement for the year ended December 31, 2009 is shown below. From your preparation of the pro forma income statement, answer the following multiple choice questions.
-The pro forma operating expenses for 2010 are ________. (See Table 4.4)

• A) $150,000
• B) $200,000
• C) $210,000
• D) $225,000

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Definitions:

Repression

A psychological defense mechanism involving the unconscious blocking of unacceptable thoughts, feelings, or impulses from conscious awareness.

Neurosis

A class of functional mental disorders involving chronic distress but neither delusions nor hallucinations.

Depersonalization

A psychological condition wherein individuals feel detached from themselves and their surroundings, as if they are observing their life from an external viewpoint.

Derealization

A mental state where the outside world feels unreal or distant, often accompanying dissociative disorders.