Continuing problem 8, Westmark Industrial’s annual income statement and balance sheet fo...

Continuing problem 8, Westmark Industrial’s annual income statement and balance sheet for December 31, 2014 appear below. Additional information about the company’s accounting methods and the treasurer’s expectations for the first quarter of 2015 appear in the footnotes.

a. Use this information and the information in problem 8 to construct a pro forma income statement for the first quarter of 2015 and a pro forma balance sheet for March 31, 2015. What is your estimated external financing need for March 31?

b. Does the March 31, 2015, estimated external financing equal your cash surplus (deficit) for this date from your cash budget in problem 8? Should it?

c. Do your pro forma forecasts tell you more than your cash budget does about Westmark’s financial prospects?

d. What do your pro forma income statement and balance sheet tell you about Westmark’s need for external financing on February 28, 2015?