Question

Calgary Industries is preparing a budgeted income statement for 2020 and has accumulated the following information. Predicted sales for the year are $730,000 and cost of goods sold is 40% of sales. The expected selling expenses are $81,000 and the expected general and administrative expenses are $90,000. The company's income tax rate is 30%. The budgeted net income for 2020 is:

Answer 1

$186,900

Step-by-step explanation:

Calculation to determine what The budgeted net income for 2020 is:

2020 BUDGETED NET INCOME

Sales $730,000

Variable cost

Less 40% of sales ($292,000)

(40% of 730,000)

Less Selling expense ($81,000)

Less Administrative expense ($90,000)

Earnings before taxes $267,000

($730,000-$292,000-$81,000-$90,000)

Less Income tax expense

30% of EBT ($80,100)

(30% of 267,000)

Net Income $186,900

($267,000-$80,100)

Therefore The budgeted net income for 2020 is:$186,900