Question 5* (forecast of unusual items) -Based on current year\'s financial stat

Question

Question 5* (forecast of unusual items) -Based on current year's financial statements and other inputs, forecast the following items for the next year. Depreciation expense Interest expense Retained earnings on the balance sheet. (Assume the retained earnings from the forecasted income statement is 65.3) -AFN and Notes Payable. (Assume the forecasted required assets are 2,200, and the forecasted specified liabilities and equity are 2,085.3) See spreadsheet file T08 Forecasted Financial Statementsxls 18

Explanation / Answer

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Forecasted Increase in assets 2200 Add: Current Year assets 2000 So, forecasted assets 4200 Depreciation/Net PPE= 10.2%(Average) Net PPE forecasted = 4200/2000*1000= 2100 Depreciation=2100*10.2%= 214.2 Forcasted sales can be calculated as = 3000/2000*4200= 6300

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