This spreadsheet assignment is a continuation of those given in earlier chapters. If you completed those assignments, you have a headstart on this one. Refer to the instructions for preparing the revised financial statements for 2011 as given in part (1) of the Cumulative Spreadsheet Analysis assignment in Chapter 3.

1. Skywalker wishes to prepare a forecasted balance sheet, a forecasted income statement, and a forecasted statement of cash flows for 2012. Clearly state any additional assumptions that you make. Use the financial statement numbers for 2011 as the basis for the forecast, along with the following data:

(a) Sales in 2012 are expected to increase by 40% over 2011 sales of $2,100.
(b) In 2012, Skywalker expects to acquire property, plant, and equipment for $240.
(c) The $480 in operating expenses reported in 2011 breaks down as follows: $15 depreciation expense and $465 other operating expenses.
(d) No new long-term debt will be acquired in 2012.
(e) No cash dividends will be paid in 2012.
(f) New short-term loans payable will be acquired in an amount sufficient to make Skywalker’s current ratio in 2012 exactly equal to 2.0.
(g) Skywalker does not expect to repurchase additional shares of stock in 2012.
(h) Because changes in future prices and exchange rates are impossible to predict, Skywalker’s best estimate is that the balance in accumulated other comprehensive income will remain unchanged in 2012.
(i) In the absence of more detailed information, assume that investment securities, long-term investments, other long-term assets, and intangible assets will all increase at the same rate as sales (40%) in 2012.
(j) In the absence of more detailed information, assume that other long-term liabilities will increase at the same rate as sales (40%) in 2012.

In addition, assume the following:

(k) The investment securities are classified as available-for-sale. Thus, cash from the purchase and sale of these securities is classified as an investing activity.
(l) Transactions impacting other long-term assets and other long-term liabilities accounts are operating activities.

For this exercise, the current assets are expected to behave as follows:

(m) Cash, investment securities, and inventory will increase at the same rate as sales.
(n) The forecasted amount of accounts receivable in 2012 is determined using the forecasted value for the average collection period (computed using the end-of-period accounts receivable balance). The average collection period for 2012 is expected to be 14.08 days.

2. Repeat (1), with the following changes in assumptions:

(a) Average collection period is expected to be 9.06 days.
(b) Average collection period is expected to be 20 days.

3. Comment on the differences in the forecasted values of cash from operating activities in 2012 under each of the following assumptions about the average collection period: 14.08 days, 9.06 days, and 20 days.