Brief Exercise 21-8 North Company has completed all of its operating budgets. Th

Question

Brief Exercise 21-8

North Company has completed all of its operating budgets. The sales budget for the year shows 50,820 units and total sales of $2,391,000. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $303,100. Interest is estimated to be $10,000. Income taxes are estimated to be $220,400.

Prepare a budgeted multiple-step income statement for the year ending December 31, 2017.

NORTH COMPANY
Budgeted Income Statement

For the Quarter Ending December 31, 2017For the Year Ending December 31, 2017December 31, 2017

Selling and Administrative ExpensesInterest ExpenseOperating ExpensesIncome from OperationsEnding InventoryGross ProfitBeginning InventoryTotal Operating ExpensesSalesCost of Goods SoldNet Income / (Loss)PurchasesIncome Before Income TaxesIncome Tax Expense

$

Income from OperationsInterest ExpenseCost of Goods SoldOperating ExpensesTotal Operating ExpensesEnding InventoryGross ProfitSelling and Administrative ExpensesPurchasesIncome Tax ExpenseSalesBeginning InventoryIncome Before Income TaxesNet Income / (Loss)

Net Income / (Loss)Income Tax ExpenseIncome from OperationsGross ProfitTotal Operating ExpensesOperating ExpensesInterest ExpenseBeginning InventoryEnding InventoryPurchasesCost of Goods SoldIncome Before Income TaxesSalesSelling and Administrative Expenses

Selling and Administrative ExpensesGross ProfitPurchasesNet Income / (Loss)Ending InventoryBeginning InventoryIncome Tax ExpenseOperating ExpensesSalesIncome Before Income TaxesTotal Operating ExpensesCost of Goods SoldIncome from OperationsInterest Expense

Beginning InventoryInterest ExpenseIncome from OperationsEnding InventorySalesCost of Goods SoldIncome Tax ExpenseGross ProfitIncome Before Income TaxesNet Income / (Loss)Operating ExpensesPurchasesSelling and Administrative ExpensesTotal Operating Expenses

Interest ExpenseCost of Goods SoldPurchasesEnding InventorySelling and Administrative ExpensesGross ProfitNet Income / (Loss)Operating ExpensesTotal Operating ExpensesBeginning InventoryIncome Before Income TaxesIncome Tax ExpenseIncome from OperationsSales

Operating ExpensesPurchasesGross ProfitSalesIncome Before Income TaxesEnding InventoryIncome from OperationsIncome Tax ExpenseSelling and Administrative ExpensesTotal Operating ExpensesNet Income / (Loss)Beginning InventoryCost of Goods Sold

Total Operating ExpensesPurchasesNet Income / (Loss)Operating ExpensesSelling and Administrative ExpensesInterest ExpenseSalesBeginning InventoryCost of Goods SoldIncome from OperationsIncome Before Income TaxesEnding InventoryGross ProfitIncome Tax Expense

Beginning InventoryGross ProfitIncome Before Income TaxesCost of Goods SoldOperating ExpensesNet Income / (Loss)Income from OperationsPurchasesIncome Tax ExpenseInterest ExpenseSalesSelling and Administrative ExpensesTotal Operating ExpensesEnding Inventory

$

Explanation / Answer

Budgeted Income Statement For the Year Ending December 31, 2017 Sales 2391000 Cost of Goods Sold -1168860 =50820*23 Gross Profit 1222140 Selling and Administrative Expenses -303100 Income from Operations 919040 Interest Expense -10000 Income Before Income Taxes 909040 Income Tax Expense -220400 Net Income / (Loss) 688640

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