Romney and Associates wishes to forecast its net income for the year 2012. Romney has assembled balance sheet and income statement data for 2011 and has also done a forecast of the balance sheet for 2012. In addition, Romney has estimated that its sales in 2012 will rise to $3,600. This information is summarized in the following table.

Instructions:
Prepare a forecasted income statement for 2012. Clearly state what assumptions youmake.

Transcribed Image Text:

2012 Forecasted Balance Sheet 2011 $ 40 450 540 Other current assets Property, plant, and equipment (net) __... Total assets Accounts payable Bank loans payable Total stockholders' equity Total labltles and stockholders' equity $1,288 228 $ 990 $ 190 $ 990 $1,288 2012 Forecasted Income Statement 2011 $3,000 .200 $1.800 100 1,440 S 260 50 $ 210 $3,600 Cost of goods sold Gross profit Other operating expenses Operating profit Interest expense Income before taxes Income taxes Net Income $ 126