What does it mean to have a pro forma balance sheet?

What is a Pro Forma Balance Sheet? A pro forma balance sheet is similar to a historical balance sheet, but it represents a future projection. Pro forma balance sheets are used to project how the business will be managing its assets in the future. For example, a pro forma balance sheet can quickly show the projected relative amount …

What are the pro forma assets for bright lawn?

Pro forma total current assets: These are determined by adding pro forma cash and pro forma accounts receivable. In this case, Bright Lawn’s pro forma total current assets are $120,000. Pro forma land: Land is the easiest of pro forma asset values to calculate.

How are long term assets determined in pro forma?

Pro forma total long-term assets: These are determined by adding up all pro forma holdings; in this case, Bright Lawn’s total long-term assets are $363,000. Pro forma total assets are determined by adding up the pro forma total current assets and the pro forma total long-term assets; in this case, it is $483,000.

How to estimate accounts receivable in pro forma?

Pro forma accounts receivable: To estimate the accounts receivable on December 31, you need to take into consideration the average collection time of receivables and the sales projections for prior periods. For example, let’s assume that Bright Lawn receives payment 30 days after services are performed.

What happens to equity and preference capital in proforma?

(e) Generally the value of equity and preference capital is not to be changed. It remains same in proforma balance sheet. (f) Loans etc. also remain same in the proforma balance sheet. These are to be changed only if some additional information is given.

Which is surplus funds available in proforma balance sheet?

If the liabilities exceed assets, the balancing item would be ‘surplus funds available. Prepare Proforma Balance Sheet from the following information for the year 2008: (a) Reserves to increase by Rs. 15 lakhs in the next year.