Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals.

Prompt: First, review the Final Project Scenario document and the accompanying Final Project Workbook. Follow the instructions below and complete the workbook with the information provided in the scenario. Using your review of the scenario, develop a management analysis brief that addresses the critical elements indicated below. Use information from your accounting workbook to support your claims in the management analysis brief.

Note: Milestone Two is a draft of some critical elements of the final project. Note that the management analysis brief informs the management analysis memo in
the final project.

Specifically, the following critical elements must be addressed:

I. Accounting Workbook: Your accounting workbook must include appropriate calculations and statements:
A. Create pro forma financial statements for predicting ability to meet future expansion goals. Pro Forma Statements are “what if” statements. If
the company opens the second location, what will the budgeted income statement and budgeted balance sheets be?
II. Notes to the Financial Statements: You will find an example for how to format these notes located in the module resources. Your notes must contain
the following:
A. Create appropriate notes as year–to–year documentation for managing depreciation, supplies, and inventory.
B. Create appropriate notes for long–term debt.

III. Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.

A. Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals.

B. Describe the implications of inventory costing, contingent liabilities, and revenue recognition.

C. Identify potential issues in interpretation of financial information, providing examples to support your ideas.