Chapter 4, Problem 4.17P

a)

Summary Introduction

To calculate: The pro forma balance sheet statement using judgmental approach.

Introduction:

The simplified method to prepare pro forma balance sheet is known as judgmental approach.

b)

Summary Introduction

To discuss: How much additional financing is required by Industry L for the year 2016.

Introduction:

Financing refer to the activities carried out by a company to mobilize funds to carry out the business activities. The examples for financing activities are purchase of bonds and issuance of common shares.

c)

Summary Introduction

To explain: Whether Industry L would adjust its planned dividend to escape from the situation described in part b.

Introduction:

Financing refer to the activities carried out by a company to mobilize funds to carry out the business activities. The examples for financing activities are purchase of bonds and issuance of common shares.