At the most recent strategic planning meeting, the board of directors of your company has voted

ACCOUNTING 1




Accounting




[Insert name]


[Institutional Affiliation]

, ACCOUNTING 2


The basic assumptions of the projections made on percentage of sales method


The basic assumption is that there is no inflation in the business environment in that the

increase in the sales will mainly be caused by an increase in production and not an increase in the

selling price. In addition, it is assumed that the company will be operating at full capacity due to

increase in the finance to boost up the production process. Therefore, the increase in production

will demand an increase in fixed assets in future. Nevertheless, the capital remains constant

throughout the forecasting period in that there is no issuance of preference shares or ordinary

shares or debentures.


It is further assumed that the relationship between the balance sheet items and the sales

remain constant throughout the forecasting period. More so, the profit margin will be realized

and shall remain constant during the forecasting period.


Projected income statement


SEARS CORPORATION
INCOME STATEMENT FOR THE YEAR ENDING
31ST
Revenue $ 4,583

Operating expense 1200
Purchase expenses: 883
54
Utilities 0
18
Depreciation 6
14
Advertisement 2
31
Interest expense 0
3,26
Total expenses 1
1,32
Operating income 2