Budgeted Income Statement Pendleton Company, a merchandising company, is develop
ID: 2570302 • Letter: B
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.
Correct
1.00 points out of 1.00
Income Statement
For Year Ending December 31, 2014 Gross sales $3,000,000 Less: Estimated uncollectible accounts (60,000) Net sales 2,940,000 Cost of goods sold (1,650,000) Gross profit 1,290,000 Operating expenses (including $25,000 depreciation) (750,000) Net income $540,000
Explanation / Answer
Answers
Pendleton Company
Income Statement
For Year Ending December 31, 2014
Original Figures
Budgeted Figures
WORKING for Budgeted figures
Gross sales
$3,000,000
$3,307,200
[3000000 x 1.06 x 1.04]
Less: Estimated uncollectible accounts
(60,000)
(66,144)
[3307200 x 2%]
Net sales
2,940,000
3,241,056
[3307200 – 66144]
Cost of goods sold
(1,650,000)
(1,767,480)
[1650000 x 1.04 x 1.03]
Gross profit
1,290,000
1,473,576
Net Sales – Cost of Goods Sold
Operating expenses (including $25,000 depreciation)
(750,000)
(822,500)
[(725000 x 1.1) + 25000]
Net income
$540,000
$651,076
Gross profit – Operating expense
Pendleton Company
Income Statement
For Year Ending December 31, 2014
Original Figures
Budgeted Figures
WORKING for Budgeted figures
Gross sales
$3,000,000
$3,307,200
[3000000 x 1.06 x 1.04]
Less: Estimated uncollectible accounts
(60,000)
(66,144)
[3307200 x 2%]
Net sales
2,940,000
3,241,056
[3307200 – 66144]
Cost of goods sold
(1,650,000)
(1,767,480)
[1650000 x 1.04 x 1.03]
Gross profit
1,290,000
1,473,576
Net Sales – Cost of Goods Sold
Operating expenses (including $25,000 depreciation)
(750,000)
(822,500)
[(725000 x 1.1) + 25000]
Net income
$540,000
$651,076
Gross profit – Operating expense
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