Consider the following simplified financial statements for the yoo corporation (assuming no income taxes):

income statement balance sheet
sales $45,700 assets $21,900 debt $5,900
costs 40,100 equity 16,000
net income $5,600 total $21,900 total $21,900
the company has predicted a sales increase of 6 percent. it has predicted that every item on the balance sheet will increase by 6 percent as well.

create the pro forma statements and reconcile them.

These are the new and reconciled statements

Explanation:

First, we have to design the original statements this way:

Yoo Corporation

Income statement

Sales                    45.700

Costs        40.100  

Net income5.600  

Total       45.700     45.700

Yoo Corporation

Financial position statement

Assets    21.900  

Debt                 5.900

Equity                16.000

Total    21.900       21.900

Now we can create the new statements multiply every item by 1,06 or 106% to include the increase of 6 percent

Yoo Corporation

Income statement

Sales                  48.442

Costs        42.506  

Net income  5.936  

Total        48.44248.442

Yoo Corporation

Financial position statement

Assets                         23.214  

Debt    6.254

Equity  16.960

Total         23.21423.214

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer; functional fixedness;