You are the most creative analyst for Green Moose Restaurant Supply, and your admirers want to see you work your analytical magic once more.

Which of the following are assumptions made by the initial income statement forecast?Check all that apply.

A. The cost of sales percentage for Green Moose Restaurant Supply will decrease due to economies of scale.

B. The forecasted increase in net sales is 18.00%.

C. No excess capacity currently exists.

D. Spontaneously generated funds will sufficiently cover any financing needs.

E. Green Moose Restaurant Supply will be issuing additional debt in the coming year.

Suppose Green Moose had neither sufficient excess capacity to handle any forecasted increases in operations nor sufficient retained earnings to increase the level of company asset up to the amount necessary for production. This deficiency is called (additional funds needed/added fair needs/alternative fiduciary necessities).

These funds could be acquired in which of the following forms?Check all that apply.

A. Repurchase of outstanding common stock

B. Issuing additional common stock

C. Issuing long-term bonds

D. Borrowing from a bank using notes payable

\begin{tabular}{lcc} \hline & This Year's Actual Results & Next Year's Initial Forecast \\ \hline Net sales & $15,000,000 & $17,700,000 \\ Cost of goods sold & 12,000,000 & 14,160,000 \\ Gross profit & $3,000,000 & $3,540,000 \\ Fixed operating costs except depreciation & 750,000 & 750,000 \\ Depreciation & 300,000 & 354,000 \\ Earnings before interest and taxes & $1,950,000 & $2,301,000 \\ Interest & 300,000 & 300,000 \\ Earnings before taxes & $1,650,000 & $2,001,000 \\ Taxes & 660,000 & 800,400 \\ Net income & $990,000 & $1,200,600 \\ Common dividends & 534,600 & 534,600 \\ Addition to retained earnings & $455,400 & $666,000 \\ Earnings per share & $0.20 & $0.24 \\ Dividends per share & $0.11 & $0.11 \\ Number of common shares (millions) & 5.00 & 5,00 \\ \hline \end{tabular}