As applied to the pro forma balance sheet,which of the statements below is FALSE?
A)The company looks at the prior year's balance sheet and finds each line's percentage of total assets.
B)The company forecasts the coming year's total assets based on expected changes such as the completion of capital projects,desired levels of certain accounts such as cash and inventories,and additional borrowing for dividend purposes.
C)If a large capital project will be completed in the coming year and the Plant,Property and Equipment line will grow significantly,its percentage of total assets should increase.
D)Financing a capital project may require additional debt financing,causing the percentage of long-term debt to rise above its prior year's percentage of total assets.

Question

Quizplus · Accepted Answer

The statement is false because additional borrowing for dividend purposes is not typically a factor in forecasting total assets. Total assets are usually forecasted based on operational needs and investment activities, not for financing dividends.

As Applied to the Pro Forma Balance Sheet,which of the Statements