1. To ensure that the financial statements articulate, it is important that the projected change in the cash balance on the balance sheet each year agrees with

the net change in cash on the projected statement of cash flows.

2. In forecasting revenue, projecting changes in future selling prices for a firm's products depends on factors specific to the firm and its industry that might affect demand and price elasticity. Which of the following companies would most likely not be able to increase prices in the near future?

A firm in a capital-intensive industry in which excess capacity exists.

3. If a company has very low operating leverage (i.e., a low proportion of fixed costs in the cost structure) and no changes are expected in operations, then

using common-size income statement percentages can serve as a reasonable basis for projecting future operating expenses.

4. Forecasting financial statements requires identifying financial flexibility in order to project how the firm will

balance future resources with future claims on resources.

5. As a firm progresses through the introduction stage of its life cycle, what type of financial flexible account will it be more likely to use to balance the balance sheet?

Issued equity

6. As a firm progresses through the maturity stage of its life cycle, what type of financial flexible account will it be more likely to use to balance the balance sheet?

Share repurchases

7. Card Sharks, Inc., maintains a cash balance equivalent to 30 days of sales. Sales in 20X1 amounted to $352,412 and the company expects growth in 20X2 of 33% and in 20X3 of 40%. Given the information provided, what is Card Sharks' 20X2 projected year-end cash balance?

$38,524

8. Card Sharks, Inc., maintains a cash balance equivalent to 30 days of sales. Sales in 20X1 amounted to $352,412 and the company expects growth in 20X2 of 33% and in 20X3 of 40%. Given the information provided, what is Card Sharks' projected 2013 sales?

$656,191

9. When projecting operating expenses, it is important to determine the mix of fixed and variable costs. One clue suggesting the presence of fixed costs in cost of goods sold is

that the percentage increase in cost of goods sold in prior years is significantly less than the percentage increase in sales.

10. Project year-end retained earnings for Construction Company for 20X3 based on the following facts:
    Retained earnings at 31 December 20X2: $126,000
    Other comprehensive income items in 20X3: $1,500
    Dividends declared in 20X3: $20,000
    Net loss for 20X3: ($78,000)
    Common shares issued in 20X3: $22,000
    No other equity transactions in 20X3

$28,000