Budgeted Income Statement Pendleton Company, a merchandising company, is develop

Question

Budgeted Income Statement
Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:

The following are management’s goals and forecasts for 2015:

Required
Prepare a budgeted functional income statement for 2015.

Do not use negative signs with any of your answers.

Pendleton Company
Income Statement
For Year Ending December 31, 2014 Gross sales $1,500,000 Less: Estimated uncollectible accounts (30,000) Net sales 1,470,000 Cost of goods sold (825,000) Gross profit 645,000 Operating expenses (including $25,000 depreciation) (375,000) Net income $270,000

Explanation / Answer

Pendleton Company Budgeted income statement For the year ending December 31, 2015 Sales ($1,500,000*6%*4%) $ 1,653,600 Less: Estimated uncollectible accounts ($1,653,600 * 2%) $     (33,072) Net sales $ 1,620,528 Cost of goods sold ($825,000*103%) $   (849,750) Gross profit $     770,778 Operating expense ($375,000-$25,000)*110%+$25,000) $   (410,000) Net income $     360,778

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