Forecast Assumptions

Mr. Joyner feels that the company will continue to grow in the foreseeable future. In order to produce projected statements for 1991, he has provided some support showing that you should use the following assumptions:

1. Net sales will increase by 14% in 1991 from the 1990 levels. Cost of sales and general & administrative expenses will account for the same percentage of sales as in 1990. Salaries and wages and officers' salaries are expected to increase by 4% from 1990. The tax rate is estimated at 35%. All other expenses, interest expense and other income will continue to grow proportionately to the first four months for the remaining eight months of the year.