This spreadsheet assignment is an extension of the spreadsheet assignment given in Chapter 13, part (1). Refer back to the instructions given in Chapter 13. That spreadsheet can form the foundation for this assignment.

1. In addition to preparing forecasted financial statements for 2012, Skywalker also wishes to prepare forecasted financial statements for 2013. All assumptions applicable to 2012 are assumed to be applicable to 2013. Sales in 2013 are expected to be 40% higher than sales in 2012. (Clearly state any additional assumptions that you make.)

2. Assume that Skywalker expects the number of days’ sales in inventory in both 2012 and 2013 to be 60 days instead of 107.6 days. This change should make the forecasted level of the short-term loans payable in your spreadsheet negative for both 2012 and 2013.

(a) Explain why this change causes negative short-term loans payable.
(b) Because a negative amount of short-term loans payable is not possible, adjust your spreadsheet so that the value of short-term loans payable cannot be less than zero. What is the forecasted current ratio for 2012 and 2013 after you make this adjustment?