The key inputs for preparing pro forma income statements using the simplified approaches are the
A) sales forecast for the coming year and financial statements for the preceding year.
B) sales forecast for the preceding year and financial statements for the coming year.
C) cash budget for the coming year and sales forecast for the preceding year.
D) sales forecast for the coming year and the cash budget for the preceding year.

Question

Quizplus · Accepted Answer

The key inputs for preparing pro forma income statements using the simplified approaches are the sales forecast for the coming year and financial statements for the preceding year. This is because the sales forecast provides an estimate of expected revenues for the coming year, which is a major driver of the income statement. The financial statements for the preceding year provide a baseline for estimating expenses and other items that affect the income statement, such as depreciation and interest expense.

The Key Inputs for Preparing Pro Forma Income Statements Using