Question

How do you prepare projected income statement, balance sheet, and cash flow?

I have all the financial statements from the past years, I just need a little head start on where to begin!

Thanks!

Answer 1

Step 1 : Post closing entries if not posted

Step 2: Prepare Adjusted Trail balance after posting closing entries

Step 3 : Prepare Income Statement - Start with Revenue followed by all expenses and then arrive at the Net income.

Step 4 : Prepare Statement of Retained Earnings (Beginning balance + Net income - Dividends)

Step 5 : Prepare Balance (Assets and Liabilities and Shareholders' Equity)

Step 6 : Prepare Cash flow Statement based on Income Statement and Balance Sheet.