What is the last step in preparing pro forma financial statements?
A)Project the statement of cash flows from amounts on the projected balance sheet and income statement.
B)Project operating revenues and operating expenses other than the cost of financing and income taxes.
C)Project the assets required to support the level of projected operating activity.
D)Project the financing (liabilities and contributed capital) required to fund the level of assets.
E)Project the cost of financing the debt, income tax expense, net income, dividends, and the change in retained earnings.

Question

Quizplus · Accepted Answer

The last step in preparing pro forma financial statements involves projecting the statement of cash flows. This step integrates the data from the projected balance sheet and income statement to show how changes in balance sheet accounts and income affect cash and cash equivalents, thus completing the financial picture for the period being forecasted.

What Is the Last Step in Preparing Pro Forma Financial