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19 July, 21:13

Preparing budgeted income statement.

Gyro Company has the following totals from its operating budgets:

Selling and administrative expenses budget $244,500

Cost of goods sold budget 727,300

Sales budget 1,222,700

Prepare a budgeted income statement for the year ended December 31, 2011, assuming that income from operations is taxed at a rate of 30%.

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  1. 19 July, 23:38
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    Budgeted net income is $175,630

    Explanation:

    The budgeted income statement for the year ended 31 December, 2 011 is presented below, starting with the sales budget amount while budgeted costs of good sold and selling and administrative expenses are deducted from sales,

    Budgeted sales $1,222,700

    costs of goods sold ($727,300)

    operating income $495,400

    Selling and administrative expenses ($244,500)

    Profit before tax $250,900

    Taxes ($250,900*30%) ($75,270)

    net income $175,630
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