What Is the First Step in Preparing Pro Forma Financial

Multiple Choice

What is the first step in preparing pro forma financial statements?

A) Project operating revenues.
B) Project operating expenses other than the cost of financing and income taxes.
C) Project the assets required to support the level of projected operating activity.
D) Project the financing (liabilities and contributed capital) required to fund the level of assets.
E) Project the cost of financing the debt, income tax expense, net income, dividends, and the change in retained earnings.