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

question 130

Multiple Choice

Table 4.4
Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31,2019,for Hennesaw Lumber,Inc.
Hennesaw Lumber,Inc.estimates that its sales in 2019 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 2019.Hennesaw Lumber,Inc.'s income statement for the year ended December 31,2018 is shown below.From your preparation of the pro forma income statement,answer the following multiple choice questions.
-The pro forma operating expenses for 2019 are ________.(See Table 4.4)

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

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